Cost of revenue
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Cost of revenue is the total of all costs incurred directly in producing, marketing, and distributing the products and services of a company to customers. Cost of revenue can be found in the company
income statement An income statement or profit and loss accountProfessional English in Use - Finance, Cambridge University Press, p. 10 (also referred to as a ''profit and loss statement'' (P&L), ''statement of profit or loss'', ''revenue statement'', ''statemen ...
. Generally, any costs that are directly connected with
manufacturing Manufacturing is the creation or Production (economics), production of goods with the help of equipment, Work (human activity), labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector ...
and distribution of goods and services can be added to cost of revenue (i.e. direct costs). Indirect costs (e.g. depreciation, salaries paid to management or other fixed costs) are excluded. Cost of revenue is different from Costs of Goods Sold (COGS) in that it includes costs such as distribution and marketing.


Example

Definition of cost of revenue from the annual report of an internet-based company: "Cost of revenue. Our cost of revenue consists primarily of expenses associated with the delivery and distribution of our products. These include expenses related to the operation of our
data centers A data center (American English American English (AmE, AE, AmEng, USEng, en-US), sometimes called United States English or U.S. English, is the set of varieties of the English language native to the United States. Currently, American Eng ...
, such as facility and server equipment depreciation, energy and bandwidth costs, and salaries, benefits, and share-based compensation for employees on our operations teams. Cost of revenue also includes
credit card #REDIRECT Credit card #REDIRECT Credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's promise to the card issuer to pay them for ...

credit card
and other transaction fees related to processing customer transactions, amortization of intangible assets, costs associated with data partner arrangements, and cost of virtual reality platform device inventory sold." Cost of revenue can also be found on such resources as Yahoo! Finance and Google Finance.


References

{{Reflist Corporate finance Costs