Cost of Goods Manufactured Calculator

Cost of goods manufactured (COGM)⇒ is the total of the costs directly attributable to producing items that were brought to completion in the manufacturing process during the period, whether manufacturing on them was begun before the current period began or during the current period. For each unit brought to completion, cost of goods manufactured includes the direct material and direct labor costs of the unit and an allocation of a portion of manufacturing overhead costs.

The cost of goods manufactured represents the cost of the units completed and transferred out of workin-process inventory during the period. COGM does not include the cost of work that was done on units that were not finished during the period.

Cost of goods manufactured is calculated using the following formula:

Direct Materials Used = Beginning Direct Materials Inventory + Purchases + Transportation-In – Net Returns – Ending Direct Materials Inventory

The COGM of a manufacturing company will be part of its calculation of cost of goods sold (COGS).

As with the calculation of COGS, the calculation of COGM simplifies reality because it assumes that all items of work-in-process inventory were either completed during the period or are in ending work-in-process inventory. In reality, some of the work-in-process inventory may have been lost, damaged or otherwise not used during the period, and therefore some of the raw materials entered into production or items worked on during the period will not be in ending inventory