If costs aren’t in COGS, they are “below the line” (ie the contribution line). Often they will be grouped together under “Selling and General Administrative Expenses”, “Energy”, “Property” and so on. These costs are incurred regardless of sales. They increase the operating risk of the business and for this reason, companies often choose to outsource many of these expenses.
Thus, instead of having salaried engineers, a company may use sub-contractors when required. Generally, the hourly rate for a contractor will be more than the hourly rate of a salaried engineer but those hourly charges can be turned off very quickly and without having to deal with employment legislation and severance pay.