Cost of Goods Sold Calculator
This calculator helps determine the cost of goods sold (COGS) during an accounting period. It's essential for calculating gross profit, managing inventory, and preparing accurate financial reports in retail, manufacturing, and service industries.
COGS (Cost of Goods Sold) Calculator
Cost of Goods Sold Formula
Explanation:
COGS measures the direct cost of producing or purchasing the goods a company sells during a specific period. It excludes indirect expenses like distribution or marketing and is crucial for understanding profitability.
Cost of Goods Sold is a key component of a company’s income statement. It directly affects gross profit and is often used for:
- Pricing strategies
- Tax reporting
- Inventory management
Example Variables:
- Beginning Inventory: $15,000
- Purchases: $10,000
- Ending Inventory: $5,000
- COGS = 15,000 + 10,000 – 5,000 = $20,000
Use Cases:
- Retail and eCommerce businesses tracking stock value
- Manufacturing businesses calculating production cost
- Financial analysis and audit preparation
Following information has been extracted the books of leather product manufacturing company to prepare material ledger card for the month of January .
January 1: Company had 50 meter leather sheet @ Rs 210.98 per meter
January 4: Purchased material of 2,000 meter @ Rs 315 per meter
January 13: Issued 1,000 meter material
January 29: Issued 750 meter material
Following information is related to direct labor cost
Workers completed the assigned job to manufacture the leather product in the month of January based upon following information and the company observe the Halsey Premium plan.
Wage rate per hour Rs 104
Time allowed for the job 240 hours
Time taken 176 hours
Following cost incurred during the period to manufacture the product
Factory overhead applied : Rs 45,000
Closing finished goods: Rs 15,000
Closing work in process: Rs 5, 000
There was no beginning inventory in finished goods and work in process.
Required:
1. Prepare Material Ledger Card by using first in first out (FIFO) inventory valuation method under perpetual inventory system for the month of January.
2. Calculate gross earnings of the workers for the month of January .
3. Prepare Cost of Goods Sold Statement for the month of January.
Cost calculators can help you see each step of the calculation. You just need to enter your unsolved math expressions and these calculators solve the calculations in seconds.
Why is freight in or freight out not included in this formula? Should it be? Some sources on the internet say yes & others say no. What is your opinion?
Great tool!
Does this work the same way for accrual tax returns? I have a CPA telling me I should no be deducting ending inventory or that I should be including the increase in inventory as part of the purchases. I can not find anything that says that and he wants me to amend three years of tax returns.
How to account for free materials received and free utilities for which am not paying due to government subsidy
Good formatting 👍🏿
To simple.. let’s see a real heavy duty COGSC