Which items are included in cost of goods sold (COGS) for a salon?

• A. Wages for service staff.
• B. Salaries and rent.
• C. Marketing expenses.
• D. Retail products used and supplies used during services.

Answer: (D)

COGS covers the costs tied directly to delivering the service. In a salon, that means the items you use up during the service—color, shampoos, treatments, disposable supplies like gloves and capes, towels, and any other consumables. These are variable costs that vary with how many services you perform, and they become part of the cost of providing each service.

Wages for service staff are considered labor costs, typically tracked separately as payroll. Rent is a fixed overhead expense for the space, and marketing is a selling/operating expense. They aren’t part of the direct cost of delivering the service, so they aren’t included in COGS.

So the best choice is the items that are consumed during the service.