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  • 1.  Cost of Services

    Posted 04-15-2020 09:38 PM
    Hi,

    Can someone elaborate on what is the cost of services is? I was solving a problem and came across this term. First, I got confused about it with the cost of goods sold, but later realized that this one is totally different. In the problem, this was excluded from gross revenue.

    Thank you.

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    Kamlesh Rathod
    Toronto ON
    Canada
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  • 2.  RE: Cost of Services

    Posted 04-16-2020 10:56 AM
    Hi Kamlesh,

    I believe that Cost of Services and Cost of Gods Sold can be used interchangeably. I suppose it depends on the industry you are in. If you are tracking inventory, you may use COGS, if you are in a service based industry you may use Cost of Services. If dealing with both you could calculate both your COGS and Cost of Services and group them as Cost of Sales on your income statement. The important piece is identifying whether or not the costs are client/product related or Company OH. I hope this helps.


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    Robert Rossetti CMA
    Director/Manager
    Philadelphia PA
    United States
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    Original Message


  • 3.  RE: Cost of Services

    Posted 04-17-2020 09:55 AM
    When I worked in the hospitality industry, we had both cost of goods and cost of service.  Cost of goods used for the things delivered to the customer such as a room night - sheets and towel, cleaning supplies and staff, front desk staff, etc.  Cost of service exclude cost of items like the sheets and towels while picking some admin costs like first line supervisory, recruiting and training costs.

    Cost of Goods was disclosed publicly, while cost of service was purely for management decision making.

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    Karl Wood
    Analyst
    Carrollton TX
    United States
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    Original Message