Cost of Goods Manufactured Calculator

Definition

Cost of Goods Manufactured (COGM) is the total production cost of goods completed during an accounting period. It includes direct materials, direct labor, and manufacturing overhead.

Formulas

To calculate direct material costs:

$\text{Direct Materials} = (\text{Beginning Raw Materials Inventory} + \text{Purchases of Raw Materials}) \\ - \text{Ending Raw Materials Inventory}$

To calculate total manufacturing costs:

$\text{Total Manufacturing Costs} = \text{Direct Materials} + \text{Direct Labor} \\ + \text{Manufacturing Overhead}$

To calculate Cost of Goods Manufactured (COGM):

$\text{COGM} = (\text{Beginning WIP Inventory} + \text{Total Manufacturing Costs}) \\ - \text{Ending WIP Inventory}$

Example

Suppose a manufacturing company has the following financial data for a specific accounting period:

Beginning Raw Materials Inventory: $8,000
Purchases of Raw Materials: $30,000
Ending Raw Materials Inventory: $6,000
Direct Labor Costs: $20,000
Manufacturing Overhead: $12,000 (includes utilities, indirect labor, etc.)
Beginning Work-in-Process (WIP) Inventory: $3,000
Ending WIP Inventory: $4,500

Step 1: Calculate direct material costs:

$\text{Direct Materials} = (\$8,000 + \$30,000) - \$6,000 = \$32,000$

Step 2: Calculate total manufacturing costs:

$\text{Total Manufacturing Costs} = \$32,000 + \$20,000 + \$12,000 = \$64,000$

Step 3: Calculate COGM:

$\text{COGM} = \$3,000 + \$64,000 - \$4,500 = \$62,500$

Cost of Goods Manufactured Calculator

Input Data

Definition

Formulas

Example