Cost of Goods Manufactured Calculator (COGM)

BySteven

To calculate the Cost of Goods Manufactured (COGM), sum up the manufacturing costs, direct labor, and manufacturing overhead, then adjust for the beginning and ending work-in-progress inventory.

COGM Calculator

Enter any 5 values to calculate the missing variable

The Cost of Goods Manufactured (COGM) Calculator determines the total production cost of goods completed during a specific period. It includes direct materials, direct labor, and manufacturing overhead while accounting for changes in work-in-progress inventory. This metric is critical for manufacturers to track production costs, set pricing strategies, and evaluate operational efficiency.

Formula:

COGM=MC+LC+MO+BWIP−EWIPCOGM = MC + LC + MO + BWIP – EWIP

VariableDescriptionUnit
COGMCOGM
Cost of Goods ManufacturedCurrency ($)
MCMaterial CostsCurrency ($)
LCLC
Labor CostsCurrency ($)
MOMO
Manufacturing OverheadCurrency ($)
BWIPBWIP
Beginning Work-in-Progress InventoryCurrency ($)
EWIPEWIP
Ending Work-in-Progress InventoryCurrency ($)

Solved Calculations:

Example 1: Calculate COGM (MC=50,000,LC=20,000,MO=15,000,BWIP=10,000,EWIP=5,000MC = 50,000, LC = 20,000, MO = 15,000, BWIP = 10,000, EWIP = 5,000

StepValueExplanation
Material Costs (MCMC)50,000 $50,000 \, \text{\$}
Given
Labor Costs (LCLC)20,000 $20,000 \, \text{\$}
Given
Overhead (MOMO)15,000 $15,000 \, \text{\$}
Given
Beginning WIP (BWIPBWIP)10,000 $10,000 \, \text{\$}
Given
Ending WIP (EWIPEWIP)5,000 $5,000 \, \text{\$}
Given
CalculationCOGM=50,000+20,000+15,000+10,000−5,000COGM = 50,000 + 20,000 + 15,000 + 10,000 – 5,000
Plug into formula
SimplificationCOGM=90,000COGM = 90,000
Simplify terms
ResultCOGM=90,000 $COGM = 90,000 \, \text{\$}
Total cost of goods manufactured

 

Example 2: Calculate COGM (MC=80,000,LC=25,000,MO=30,000,BWIP=15,000,EWIP=10,000MC = 80,000, LC = 25,000, MO = 30,000, BWIP = 15,000, EWIP = 10,000

StepValueExplanation
Material Costs (MCMC)80,000 $80,000 \, \text{\$}
Given
Labor Costs (LCLC)25,000 $25,000 \, \text{\$}
Given
Overhead (MOMO)30,000 $30,000 \, \text{\$}
Given
Beginning WIP (BWIPBWIP)15,000 $15,000 \, \text{\$}
Given
Ending WIP (EWIPEWIP)10,000 $10,000 \, \text{\$}
Given
CalculationCOGM=80,000+25,000+30,000+15,000−10,000COGM = 80,000 + 25,000 + 30,000 + 15,000 – 10,000
Plug into formula
SimplificationCOGM=140,000COGM = 140,000
Simplify terms
ResultCOGM=140,000 $COGM = 140,000 \, \text{\$}
Total cost of goods manufactured

What is the Cost of Goods Manufactured Calculator (COGM)?

The Cost of Goods Manufactured Calculator (COGM) is an efficient tool that facilitates the calculation of total manufacturing costs incurred during a specific period.

By simplifying the evaluation process, it aids businesses in tracking production expenses, preparing financial statements, and assessing operational efficiency.

To use the calculator, input key values such as direct materials, direct labor, and manufacturing overheads, along with the beginning and ending work-in-process inventory.

The tool computes the cost of goods manufactured by combining these inputs, providing insights into production costs. This calculation helps businesses analyze cost efficiency and determine the gross profit.

The calculator also distinguishes between COGM and cost of goods sold (COGS), enabling a clear understanding of the total expenses involved in manufacturing versus those incurred after production.

For example, manufacturers can utilize this tool to format COGM statements, solve accounting problems, and practice scenarios involving cost analysis.

Final Words:

Ultimately, the Cost of Goods Manufactured Calculator is a vital resource for streamlining production cost management. It empowers businesses to make informed decisions, optimize operational processes, and maintain financial transparency effectively.

 
 
 
 
Steven

Similar Posts