Cost of Goods Manufactured Statement:

Cost of goods manufactured is the total cost of goods completed during the period.

Manufacturing companies transform raw material into finished goods through the use of labor and factory facilities. For example, a company manufacturing furniture from wood or timber. The income statement prepared by a manufacturing company requires the calculation of cost of goods manufactured. But merchandising companies need no calculation of cost of goods manufactured because they do not manufacture products but buy the products manufactured by some other company and resell them at a profit.

Usually cost of goods manufactured becomes part of the cost of goods sold statement. However, a separate schedule of cost of goods manufactured may also be prepared.

Formula:

Cost of goods manufactured (COGM) may also be expressed in the form of an equation. This equation is sometime referred to as COGM formula:

Example:

Cost of Goods manufactured Statement
For the year ended December 31, 2005