What is my COGM?
Enter direct materials used (or raw materials purchases and balances), direct labor and manufacturing overhead, and work in process at the start and end of the period. Add finished goods balances to see cost of goods sold too.
- Cost of goods manufactured (COGM)
- $95,000.00
Direct labor of $25,000.00 and overhead of $23,000.00 bring total manufacturing costs to $63,000.00, and the cost of goods manufactured is $95,000.00.
- Total manufacturing costs
- $63,000.00
- Direct materials used
- $15,000.00
- Total cost of work in process
- $138,000.00
- Cost of goods sold
- $102,000.00
Cost of goods manufactured (COGM): $95,000.00. Direct labor of $25,000.00 and overhead of $23,000.00 bring total manufacturing costs to $63,000.00, and the cost of goods manufactured is $95,000.00.
The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use
How to calculate
Computes the cost of goods manufactured (COGM) from direct materials, direct labor, manufacturing overhead and work in process, with cost of goods sold.
Example with the default inputs (Direct materials Materials used, Direct materials used $15,000.00, Direct labor $25,000.00, Manufacturing overhead $23,000.00, Work in process at the start $75,000.00, Work in process at the end $43,000.00, Finished goods at the start $65,000.00, Finished goods at the end $58,000.00): Direct labor of $25,000.00 and overhead of $23,000.00 bring total manufacturing costs to $63,000.00, and the cost of goods manufactured is $95,000.00.
Method: Direct materials used = raw materials at the start + purchases − raw materials at the end (or as entered). Total manufacturing costs = direct materials used + direct labor + manufacturing overhead. COGM = work in process at the start + total manufacturing costs − work in process at the end. Cost of goods sold = finished goods at the start + COGM − finished goods at the end.
- All amounts are for the same period, from the factory’s records.
- Manufacturing overhead is the overhead charged to production in the period.
- Arithmetic is exact on the typed decimals; money shows to the cent, halves up.
Worked examples
Each example is checked against the calculator on every build.
- Direct materials Materials used, Direct materials used $15,000.00, Direct labor $25,000.00, Manufacturing overhead $23,000.00, Work in process at the start $75,000.00, Work in process at the end $43,000.00, Finished goods at the start $65,000.00, Finished goods at the end $58,000.00 gives Cost of goods manufactured (COGM) $95,000.00, Total manufacturing costs $63,000.00, Direct materials used $15,000.00, Total cost of work in process $138,000.00, Cost of goods sold $102,000.00.Source: OpenStax, Principles of Managerial Accounting, 2.1 Distinguish between Merchandising, Manufacturing, and Service Organizations (schedule of cost of goods manufactured; Koeller Manufacturing). https://openstax.org/books/principles-managerial-accounting/pages/2-1-distinguish-between-merchandising-manufacturing-and-service-organizations: 15,000 + 25,000 + 23,000 = 63,000
- Direct materials From purchases, Raw materials at the start $10,000.00, Raw materials purchased $50,000.00, Raw materials at the end $12,000.00, Direct labor $30,000.00, Manufacturing overhead $22,000.00, Work in process at the start $5,000.00, Work in process at the end $8,000.00 gives Cost of goods manufactured (COGM) $97,000.00, Total manufacturing costs $100,000.00, Direct materials used $48,000.00, Total cost of work in process $105,000.00.Source: OpenStax, Principles of Managerial Accounting, 2.1 Distinguish between Merchandising, Manufacturing, and Service Organizations (schedule of cost of goods manufactured; Koeller Manufacturing). https://openstax.org/books/principles-managerial-accounting/pages/2-1-distinguish-between-merchandising-manufacturing-and-service-organizations (direct materials used = beginning materials + purchases − ending materials)
- Direct materials Materials used, Direct materials used $12,500.50, Direct labor $8,000.25, Manufacturing overhead $4,100.75 gives Cost of goods manufactured (COGM) $24,601.50, Total manufacturing costs $24,601.50, Total cost of work in process $24,601.50.
How it works
- Direct materials used = raw materials at the start + raw materials purchased − raw materials at the end (or the amount you enter)
- Total manufacturing costs = direct materials used + direct labor + manufacturing overhead
- Total cost of work in process = work in process at the start + total manufacturing costs
- Cost of goods manufactured (COGM) = total cost of work in process − work in process at the end
- Cost of goods sold = finished goods at the start + COGM − finished goods at the end
Rules:
- Every amount is $0 or more and at most $1 quadrillion. Work in process and finished goods balances are optional; an empty work in process box counts as $0.
- Cost of goods sold shows only when you enter both finished goods balances.
- Raw materials at the end larger than the materials available (start + purchases) give no answer. So does ending work in process larger than the total cost of work in process, or ending finished goods larger than the goods available for sale.
- The arithmetic is exact on the decimals you type. Money shows to the cent, with halves rounded up (away from 0).
Assumptions
- All amounts are for the same period.
- Manufacturing overhead is the overhead charged to production in the period.
Worked examples by hand
Koeller Manufacturing. Direct materials $15,000 + direct labor $25,000 + manufacturing overhead $23,000 = $63,000 of total manufacturing costs. Plus $75,000 of work in process at the start = $138,000. Less $43,000 at the end: COGM = $95,000. With finished goods of $65,000 at the start and $58,000 at the end, cost of goods sold = 65,000 + 95,000 − 58,000 = $102,000.
Direct materials from purchases. Raw materials $10,000 at the start + $50,000 purchased − $12,000 at the end = $48,000 used. Total manufacturing costs = 48,000 + 30,000 + 22,000 = $100,000. COGM = 5,000 + 100,000 − 8,000 = $97,000.
No work in process. Materials $12,500.50 + labor $8,000.25 + overhead $4,100.75 = $24,601.50, which is also the COGM.
Other questions people ask
What is cost of goods manufactured (COGM)?
COGM is the cost of the goods a factory finished during the period. It moves the cost of completed products out of work in process and into finished goods inventory, and it feeds the manufacturer's cost of goods sold.
How do I calculate COGM?
Add direct materials used, direct labor and manufacturing overhead to get total manufacturing costs. Add the work in process at the start and subtract the work in process at the end. Koeller Manufacturing had $63,000 of manufacturing costs, $75,000 of work in process at the start and $43,000 at the end, so its COGM was $95,000.
How do I find the direct materials used?
Add raw materials purchases to the raw materials inventory at the start, then subtract the raw materials inventory at the end. $10,000 at the start, $50,000 of purchases and $12,000 at the end means $48,000 of materials went into production.
What is the difference between COGM and cost of goods sold?
COGM is the cost of goods finished; cost of goods sold (COGS) is the cost of goods sold to customers. COGS = finished goods at the start + COGM − finished goods at the end. Koeller had $65,000 of finished goods at the start and $58,000 at the end, so its COGS was 65,000 + 95,000 − 58,000 = $102,000.
What is included in manufacturing overhead?
All factory costs other than direct materials and direct labor: indirect materials such as glue and screws, indirect labor such as supervisors and maintenance staff, factory rent, utilities, insurance and depreciation of factory equipment.
Why adjust for work in process?
Some of this period’s manufacturing costs sit in products that are not finished yet, and some finished products were started last period. Adding the beginning work in process and subtracting the ending work in process leaves only the cost of goods completed this period.