COGM and COGS

Gross profit:

• Sales - COGS = Gross Profit

Cost of good sold (COGS):

• Finished Goods Beginning + COGM - Finished Goods Ending = COGS
• Goes to Income Statement

Cost of goods manufactured (COGM):

• WIP Beginning + Manufacturing Costs (DM + DL + O/H Applied) - WIP Ending = COGM
• Goes to COGS

Direct material (DM) used:

• Raw Materials Beginning + Purchase (includes freight in) - Raw Materials Ending = DM
• Goes to COGM