What is the term for the total value of materials, labor, and overhead incurred in producing a product?

The term that refers to the total value of materials, labor, and overhead incurred in producing a product is known as the Cost of Goods Sold. This figure is critical in the context of manufacturing and retail businesses as it reflects the direct costs associated with the production of goods that have been sold during a specific period.

Understanding Cost of Goods Sold is fundamental to calculating gross profit, which is the revenue remaining after deducting COGS from total sales. This metric helps businesses determine their profitability and pricing strategies. It encompasses all production costs, ensuring that businesses can accurately assess the financial implications of their manufacturing processes.

While gross profit, operating expenses, and net income are all important financial concepts, they represent different aspects of a company's financial performance. Gross profit reflects revenues minus COGS, operating expenses refer to costs not directly tied to production (like marketing and administration), and net income represents the overall profitability after all expenses have been deducted. Therefore, in the given context, the definition aligns precisely with the characteristics of Cost of Goods Sold, making it the correct answer.