Cost Goods Manufactured Schedule report
You may not need this if you are just buying and selling products without any modification since you can set CoGS similar with your purchasing price. Factories or manufacturers, usually those who have brands, are companies that should calculate it carefully. Why? Because, they need to produce competitive products that will compete in open market. It their manufacturing cost are already high, and quality are similar with others, how can they compete? Especially if they also need to promote them massively that require big cost gap between CoGM and CoGS.
To understand how this spreadsheet works, you need to understand all components in this manufacturing cost. Those components are :
Direct or raw material. For example, if your company produced bread, cookies, etc, then flours and sugar are raw materials.
Direct Labor. Employees who work to produce those cookies are classified as direct labors.
Factory Overhead. Cost other than direct material and labor.
Indirect material. Put cups and plastic bags in this category.
Indirect Labor. Supervisor who supervise employees who produce those bread and cookies belong to this classification.
Other. Machines depreciation, water and electricity bills are other expenses.
Different company could create different report or category on those factory overhead. But, basic concept is similar. You can see those three big parts in this spreadsheet. How to calculate it is as follows :
– Beginning raw material inventory : Value of raw materials in the beginning of accounting period
– Purchase of raw material inventory : Purchase made during accounting period
– Ending raw material inventory : Value of raw materials at the end of accounting period
Beginning + Purchase – Ending = Materials in Process or it is commonly called Work in Progress Inventory