in words non accounting major can understand can you tell me: For example, Home Depot sells hammers that it has purchased from a manufacturer/supplier. The Cost of Goods Sold would include not only the purchase of the hammer, but any freight costs to get it to Home Depot. Any purchase discounts would reduce the Cost of Goods Sold. If you saw that Home Depot's cost of hammer sales varied from one period to another, what do you think could be the cause or causes?