India Question on the concept cost of goods sold


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I use the terms cost of goods sold and cost of sales interchangeably (correct me if I am wrong)

1. I have understood the formula to work out COGS as opening inventory value+ Net purchases - Closing inventory value

2. It is also said that in a Trading account Gross Profit = (Net) Sales - Cost of Goods Sold

3. However, a Trading account shows debits such as carriage inward, wages and other directly related expenses like certain packing expenses to get a product ready for sale. This implies that these expenses like wages etc are also part of the calculation of cost of goods sold or else 2 above will not be valid and if they are indeed part of the COGS calculations then 1 above will not be valid

Can this anomaly (to me) please be explained and rationalized to me

Thanks
 
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Firstly, COGS and COS are separate.
COGS = Total Cost of Production + Opening Inventory Value - Closing Inventory Value. Total Cost of production is the Cost of purchases + Direct costs of production like Wages, Factory costs + Factory overheads + Factory administrative costs.

Cost of Sales shall be COGS + Selling and Distribution overheads. This clearly means that all those costs incurred before the material leaves the factory and incurred therein shall be a part of the COGS. And all those costs incurred and attributable to the materials after they leave the factory shall be a part of COS as they are incurred only on the sold quantity and not attributable on the produced quantity till they are sold.
 

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