Schedule Of Cost Of Goods Manufactured
As a business owner, it’s important to have a good understanding of your company’s finances. Understanding how your products are manufactured and the associated costs can help you make informed decisions. The Schedule of Cost of Goods Manufactured is a crucial tool in this process.
What is the Schedule of Cost of Goods Manufactured?
The Schedule of Cost of Goods Manufactured (COGM) is a document that outlines the total cost of producing a product. It includes all direct and indirect costs associated with manufacturing a product, including materials, labor, and overhead.
Why is it important?
The COGM is important because it allows you to calculate the cost of producing a product. This information can be used to set prices, determine profitability, and make informed decisions about production.
How to Create a Schedule of Cost of Goods Manufactured
Creating a COGM can be a complex process, but it can be broken down into several steps:
- Calculate the cost of raw materials used in production
- Calculate the cost of direct labor used in production
- Calculate the cost of manufacturing overhead
- Calculate the total manufacturing cost
- Add the beginning work in process inventory
- Subtract the ending work in process inventory
- The result is the cost of goods manufactured
COGM Schedule Table
| Raw Materials | $50,000 |
|---|---|
| Direct Labor | $25,000 |
| Manufacturing Overhead | $10,000 |
| Total Manufacturing Cost | $85,000 |
| Beginning Work in Process Inventory | $10,000 |
| Ending Work in Process Inventory | $5,000 |
| Cost of Goods Manufactured | $90,000 |
Events and Competitions
There are various events and competitions related to COGM that occur throughout the year. These events are designed to educate business owners and accounting professionals about the importance of COGM and how to use it effectively.
- COGM Conference – an annual conference that brings together accounting professionals to discuss best practices and new trends in COGM.
- COGM Workshop – a one-day workshop that provides hands-on training on how to create a COGM.
- COGM Competition – a competition for accounting students to showcase their understanding of COGM and related concepts.
Question and Answer
Q: What is the difference between COGM and COGS?
A: COGM is the total cost of producing a product, while COGS (Cost of Goods Sold) is the cost of the products that have been sold.
Q: Can COGM be used for service-based businesses?
A: No, COGM is only applicable to businesses that manufacture products.
Q: How often should a COGM be created?
A: A COGM should be created at the end of each accounting period, typically monthly or quarterly.
Conclusion
The Schedule of Cost of Goods Manufactured is an essential tool for any business that manufactures products. It provides valuable information that can be used to make informed decisions about pricing, production, and profitability. By understanding the COGM and related concepts, business owners can gain a better understanding of their finances and make more informed decisions.