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Selling Price of Widget $3 00 Cost of Goods Sold (Material) $1 00


Selling Price of Widget: $3.00

Cost of Goods Sold (Material) $1.00

Assume that there are only material costs associated with the Cost of Goods Sold (COGS) That is, there is no labor or other direct items associated with the manufacture of the product. For the purposes of this exercise I have classified direct labor in fixed costs.