🏭Manufacturing Cost Formulas
Cost of Goods Manufactured (COGM)
Beginning WIP + Total Manufacturing Costs - Ending WIP = COGM
What It Means
The total cost of products completed this period.
Example
Beginning WIP:$20,000
Total Mfg Costs:$150,000
Ending WIP:$25,000
$20,000 + $150,000 - $25,000
COGM = $145,000
Related Formulas
Prime Costs
Direct Materials + Direct Labor = Prime Costs
Conversion Costs
Direct Labor + Manufacturing Overhead = Conversion Costs
Total Manufacturing Costs
Direct Materials + Direct Labor + Manufacturing Overhead = Total Manufacturing Costs
Predetermined Overhead Rate
Estimated Total Mfg Overhead ÷ Estimated Allocation Base = Predetermined OH Rate
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