Cost of Goods Manufactured Calculator

What is Cost of Goods Manufactured (COGM)?

The Cost of Goods Manufactured (COGM) is a key financial metric that represents the total cost of producing finished goods during a specific period. It helps businesses understand the costs associated with manufacturing their products and is essential for inventory valuation and financial reporting.

How to Use This Calculator

1. Enter your Beginning Work in Process Inventory - the cost of partially completed products at the start of the period.
2. Enter your Direct Materials Used - the cost of raw materials that directly go into your products.
3. Enter your Direct Labor Costs - the wages paid to workers who directly manufacture your products.
4. Enter your Manufacturing Overhead Costs - indirect costs associated with production (e.g., factory rent, utilities, depreciation).
5. Enter your Ending Work in Process Inventory - the cost of partially completed products at the end of the period.
6. Click the Calculate button to determine your Cost of Goods Manufactured.

Calculation Formula

COGM = Beginning WIP + Direct Materials + Direct Labor + Manufacturing Overhead - Ending WIP

Practical Applications

• Assessing production efficiency and cost control
• Preparing financial statements and tax returns
• Setting product pricing strategies
• Identifying areas for cost reduction
• Tracking manufacturing performance over time

Example Scenario

Suppose a company has $50,000 in beginning WIP, $120,000 in direct materials, $80,000 in direct labor, $60,000 in manufacturing overhead, and $30,000 in ending WIP. The COGM would be calculated as:

COGM = $50,000 + $120,000 + $80,000 + $60,000 - $30,000 = $320,000

This means the company incurred $320,000 in costs to produce the finished goods during that period.