Cost of Goods Purchased Calculator

Formula

The formula to calculate the cost of goods purchased is:

\[ COGP = P - R/A - D + F \]

Where:

$ COGP $ is the cost of goods purchased ($)
$ P $ is the total amount of purchases ($)
$ R/A $ are any purchase returns or allowances ($)
$ D $ are any purchase discounts ($)
$ F $ is inbound freight ($)

Definition

Cost of Goods Purchased (COGP): A measure of the total cost of goods after accounting for returns, discounts, and freight. It is used similarly to the cost of goods sold (COGS) but applies to purchased items rather than sold items.

Example

Let's say the total amount of purchases (P) is $10,000, the purchase returns or allowances (R/A) are $500, the purchase discounts (D) are $200, and the inbound freight (F) is $300. Using the formula:

\[ COGP = 10000 - 500 - 200 + 300 \]

We get:

\[ COGP = 9600 \]

So, the cost of goods purchased is $9,600.