About Cost of Goods Manufactured (COGM) Calculator (Formula)
The Cost of Goods Manufactured (COGM) Calculator is a tool that uses a mathematical formula to determine the total cost of producing a product, including direct materials, direct labor, and factory overhead costs. COGM is an important metric for businesses that manufacture goods, as it provides insight into the costs associated with production and can be used to make informed decisions about pricing and production.
The formula used to calculate COGM is:
COGM = (Direct Materials + Direct Labor + Factory Overhead + Beginning Work in Progress) – Ending Work in Progress
Where COGM is the cost of goods manufactured, Direct Materials is the cost of raw materials used in production, Direct Labor is the cost of labor used in production, Factory Overhead is the indirect costs of production such as rent, utilities, and equipment, Beginning Work in Progress is the cost of unfinished goods at the beginning of a period and Ending Work in Progress is the cost of unfinished goods at the end of the period.
This calculator is useful for businesses that manufacture goods, as it can help them understand their costs and make more informed decisions about pricing and production.
By inputting the values of Direct Materials, Direct Labor, Factory Overhead, Beginning Work in Progress, and Ending Work in Progress, the calculator will calculate the COGM and help a business to understand the cost of producing a product.