Cost of Goods Sold Calculator
This calculator helps determine the cost of goods sold (COGS) during an accounting period. It's essential for calculating gross profit, managing inventory, and preparing accurate financial reports in retail, manufacturing, and service industries.
COGS (Cost of Goods Sold) Calculator
Cost of Goods Sold Formula
Explanation:
COGS measures the direct cost of producing or purchasing the goods a company sells during a specific period. It excludes indirect expenses like distribution or marketing and is crucial for understanding profitability.
Cost of Goods Sold is a key component of a company’s income statement. It directly affects gross profit and is often used for:
- Pricing strategies
- Tax reporting
- Inventory management
Example Variables:
- Beginning Inventory: $15,000
- Purchases: $10,000
- Ending Inventory: $5,000
- COGS = 15,000 + 10,000 – 5,000 = $20,000
Use Cases:
- Retail and eCommerce businesses tracking stock value
- Manufacturing businesses calculating production cost
- Financial analysis and audit preparation