The cost of goods manufactured (COGM) is a managerial accounting term that is used to show the total production costs for a specific time period.
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Put simply, COGM is the total cost a company has for manufacturing its products into finished goods.
COGM is also called the cost of goods completed, and it’s a useful metric for a company to examine its cost structure for production.
FAQs
1. What is the Cost of Goods Manufactured (COGM)?
The cost of goods manufactured (COGM) is the total cost a company has for manufacturing its products into finished goods. This includes the direct costs of producing the goods, such as the materials and labor, as well as indirect costs, such as factory overhead.
2. Why is the Cost of Goods Manufactured (COGM) important?
COGM is an important metric for companies because it shows the total cost of producing its products. This can help companies understand their cost structure and identify ways to reduce costs.
This can also help companies make better decisions about pricing and production strategies.
3. How do you calculate the Cost of Goods Manufactured (COGM) in Excel?
To calculate the cost of goods manufactured in Excel, you need to gather data on the direct and indirect costs of producing the goods. This includes the materials and labor costs, as well as factory overhead.
Once you have this data, you can use a formula to calculate the COGM for a specific time period:
Cost of Goods Manufactured = Beginning Work in Process Inventory + Total Manufacturing Cost – Ending Work in Process Inventory
4. What is the advantage of using an Excel template for Cost of Goods Manufactured (COGM)?
Excel templates can be helpful for companies because they provide a structure for gathering data and calculating the COGM. This can make it easier to track and understand the cost of producing goods.
Additionally, Excel templates can be customized to fit the specific needs of a company. This can help improve the accuracy of the data and make it easier to use for decision-making.
5. Is the Cost of Goods Manufactured (COGM) the same as COGS?
No, COGM is not the same as COGS. COGS is the cost of goods sold, which is the total cost of the products that have been sold. The COGM includes the direct and indirect costs of producing the goods, while the COGS only includes the direct costs.
