COGS(Cost of Goods Sold)
TL;DR
The direct cost of the parts and materials you sold — the foundation for calculating gross margin on a repair.
COGS (Cost of Goods Sold) is the dollar amount of materials and parts that went out the door this period. For a repair shop, COGS is the wholesale cost of the screens, batteries, cables, and accessories sold — both in repairs and at retail.
COGS is the line you subtract from revenue to get gross profit. If you charged $189 for a screen repair and the screen cost you $42 + $3 in adhesive + tools wear, your COGS on that ticket is about $45 and your gross profit is $144.
Without accurate COGS, you can't tell which repairs actually make money. A shop with strong revenue and a fuzzy COGS often discovers — too late — that one of its core repair types is breakeven.
Quick answers
Should labor be in COGS?
Depends on your accountant. Most repair shops put parts in COGS and tech labor in operating expenses. Some shops with W-2 techs allocate labor to COGS for more accurate per-ticket margin.
How do FIFO and COGS interact?
FIFO determines which lot's cost feeds into COGS. Under FIFO, your COGS reflects what you actually paid for the parts you sold first — which is the cleanest signal for pricing decisions.