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Cost Of Goods Manufactured Example. Notice that there is no calculation for the cost of goods manufactured within the cost of goods sold statement. This is because merchandising companies or firms do not involve in the production of goods.
Beginning Inventory + Additional Inventory - Ending Inventory = Cost of Goods Sold.
This video explains the concept of Cost of Goods Manufactured (COGM).
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Cost of goods manufactured example
The cost of goods manufactured is in the same place that purchases would be presented on a merchandiser's income statement. The purpose of calculating the Cost of Goods Sold is to find the Gross Profit. It not only includes the cost of materials and labor, but also both variable and fixed manufacturing overhead costs.