Cost Of Goods Sold Formula
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The document outlines the calculation of cost of goods sold (COGS) by detailing opening and closing inventory amounts for materials and finished goods, purchases and returns, direct materials consumed, cost of goods manufactured, prime costs including direct materials and labor, conversion costs including labor and factory overhead, total manufacturing costs, and the final calculation of COGS by adding opening finished goods inventory and subtracting closing finished goods inventory from the cost of goods manufactured.
Cost Of Goods Sold Formula
- 1. Cost of Goods Sold Statement. Material Opening inventory 1,572400 Add Purchases 8420,000 (Less Purchase return) (42,000) 8,378,00 Material available for use 9,950,400 (Less material inventory Closing 1,270600 Direct material consumed 8,679,800 Cost Of Goods Manufactured = Total Manufacturing cost Add Work in process (opening) = Cost of goods to be manufactured Less Work in process (Closing) = Cost of Goods Manufactured Prime Cost =Direct material+Direct Labor Conversion Cost= Direct labor+FOH Total Manufacturing Cost = Prime cost (OR) Direct material + + FOH Direct Labor + FOH Cost Of Goods Sold = Cost Of Goods Manufactured + Add opening finished good Inventory Cost of goods available for sale Less closing Finished good Inventory Cost of Goods Sold