# Cost of Goods Manufactured COGM and Sold Statement Formulas

## COGM Formula:

COGM Formula : Prime Cost = Direct Materials Cost + Direct Labor Cost

Total Factory Cost  or Manufacturing Cost = Direct Materials + Direct Labor Cost + Factory Overhead

Conversion Cost = Direct Labor Cost + Factory Overhead Cost

Cost of Goods Manufactured (COGM) = Total Factory Cost + Opening Work in Process Inventory – Ending Work in Process Inventory
Or
Cost of Goods manufactured = Direct materials cost + Direct labor cost + Factory overhead cost + Opening work in process inventory – Ending work in process inventory

Cost of goods sold (COGS) = Cost of goods manufactured + Opening finished goods inventory – Ending finished goods inventory
Or
Cost of goods sold = Direct materials cost + Direct labor cost + Factory overhead cost + Opening work in process inventory – Ending work in process inventory + Opening finished goods inventory – Ending finished goods inventory

Number of units manufactured = Units sold + Ending Finished Goods units – Opening finished goods units

Per unit cost of goods manufactured = Cost of goods manufactured / Units manufactured

Materials used or consumed = Opening inventory or materials + Net purchases of materials – Ending inventory of materials

## Income statement formulas:

Gross profit = Net sales – Cost of goods sold

Operating profit = Gross profit – Operating expenses

Operating or commercial expenses = Selling or marketing expenses + General or administrative expenses

Per unit gross profit = Gross profit / No. of units sold

Per unit net profit = Net profit / No. of units sold

Percentage of GP to sales = (Gross profit / Net sales) × 100

Percentage of net profit to sales = (Net profit / Net sales) × 100