Cost of Goods Manufactured Calculator
- Direct materials
- Direct labor
- Overhead
COGM is what finished goods cost to make this period. It feeds cost of goods sold on the income statement.
How the cost of goods manufactured calculation works
Find direct materials used
Beginning raw materials + purchases − ending raw materials. $20,000 + $80,000 − $15,000 = $85,000.
Add labor and overhead
Direct materials + direct labor + manufacturing overhead is total manufacturing cost: $85,000 + $60,000 + $40,000 = $185,000.
Adjust for work in process
Add beginning WIP and subtract ending WIP. $185,000 + $25,000 − $30,000 gives COGM of $180,000.
Carry it to cost of goods sold
COGS = COGM + beginning finished goods − ending finished goods. $180,000 + $35,000 − $40,000 = $175,000.
Worked example. With $85,000 of materials used, $60,000 direct labor and $40,000 overhead, total manufacturing cost is $185,000. Adding $25,000 beginning WIP and subtracting $30,000 ending WIP gives COGM of $180,000, or $20.00 for each of 9,000 units. Cost of goods sold is $175,000.
Cost of Goods Manufactured FAQ
What is the cost of goods manufactured formula?
COGM = direct materials used + direct labor + manufacturing overhead + beginning WIP − ending WIP. The first three together are total manufacturing cost.
What is the difference between COGM and COGS?
COGM is the cost of goods finished during the period. COGS is the cost of goods sold, which adds beginning finished goods and subtracts ending finished goods.
What is a schedule of cost of goods manufactured?
It is the report that lists materials, labor, overhead and the WIP adjustment line by line, ending in COGM. The breakdown under this calculator follows the same order.
Is total manufacturing cost the same as COGM?
Only when work in process doesn't change. If ending WIP is higher than beginning WIP, COGM is lower than total manufacturing cost.
What goes into manufacturing overhead?
Production costs you can't trace to one unit: factory rent and utilities, equipment depreciation, maintenance, supervisors and indirect supplies. Selling and office costs are not included.
What is the total manufacturing cost formula?
Total manufacturing cost = direct materials used + direct labor + manufacturing overhead. In the example, $85,000 + $60,000 + $40,000 = $185,000. COGM then adjusts this for the change in work in process.
How do you calculate manufacturing overhead?
Add up every factory cost that is not direct materials or direct labor: indirect labor, rent, heat, light, power, insurance, depreciation, property taxes and maintenance of the plant. Leave out selling and office costs. The total goes into the overhead field.
How do you find the cost per unit manufactured?
Divide COGM by the number of units completed in the period. $180,000 ÷ 9,000 units = $20.00 per unit. Use units finished, not units started, because unfinished units stay in ending WIP.
Sources: IRS Publication 334: Cost of goods sold (labor and overhead for manufacturers)