How Much is That Going to Cost Anyway? Calculating Cost of Goods Sold
One of the realities of running a business is that you will — at some point — need to make money. This means you must sell something for more than it cost to make it. Profit = Total Revenue - Total Expenses So, to sell a service or feature (like a third-party API portal) at a profit, we need to understand how much it costs to make it, so we know how much to sell it for. In business parlance, the quantity we are looking for is the cost of goods sold — the accumulated costs used to create a good, including direct labor, materials, and any overhead. ...