Cost of Goods Purchased Calculator

Formula

The formula to calculate the cost of goods purchased is:

\[ COGP = P - R/A - D + F \]

Where:

$ COGP $ is the cost of goods purchased ($)
$ P $ is the total amount of purchases ($)
$ R/A $ are any purchase returns or allowances ($)
$ D $ are any purchase discounts ($)
$ F $ is inbound freight ($)

Definition

Cost of Goods Purchased (COGP): A measure of the total cost of goods after accounting for returns, discounts, and freight. It is used similarly to the cost of goods sold (COGS) but applies to purchased items rather than sold items.

Example

Let's say the total amount of purchases (P) is $10,000, the purchase returns or allowances (R/A) are $500, the purchase discounts (D) are $200, and the inbound freight (F) is $300. Using the formula:

\[ COGP = 10000 - 500 - 200 + 300 \]

We get:

\[ COGP = 9600 \]

So, the cost of goods purchased is $9,600.

Extended information about "Cost-of-Goods-Purchased-Calculator"

Calculation of Cost of Goods Sold

Definition: The cost of goods sold (COGS) is the direct costs attributable to the production of the goods sold by a company.

Formula: $ \text{COGS} = \text{Beginning Inventory} + \text{Purchases} - \text{Ending Inventory} $

Example: $ \text{COGS} = 10000 + 5000 - 2000 $

COGS: Cost of Goods Sold
Beginning Inventory: The value of inventory at the start of the period
Purchases: The cost of additional inventory purchased during the period
Ending Inventory: The value of inventory at the end of the period

Cost of Goods Calculation

Definition: This calculation determines the total cost of goods available for sale during a period.

Formula: $ \text{Cost of Goods Available for Sale} = \text{Beginning Inventory} + \text{Purchases} $

Example: $ \text{Cost of Goods Available for Sale} = 8000 + 3000 $

Cost of Goods Available for Sale: The total cost of inventory available for sale during the period
Beginning Inventory: The value of inventory at the start of the period
Purchases: The cost of additional inventory purchased during the period

How to Find Cost of Goods Purchased

Definition: The cost of goods purchased is the total cost incurred to acquire inventory during a period.

Formula: $ \text{Cost of Goods Purchased} = \text{Purchases} + \text{Freight In} - \text{Purchase Returns and Allowances} $

Example: $ \text{Cost of Goods Purchased} = 4000 + 500 - 200 $

Cost of Goods Purchased: The total cost incurred to acquire inventory
Purchases: The cost of inventory purchased
Freight In: The cost of transporting the inventory to the business
Purchase Returns and Allowances: The cost of returned inventory and allowances

Calculate Cost of Goods Available for Sale

Definition: This calculation determines the total cost of goods available for sale during a period.

Formula: $ \text{Cost of Goods Available for Sale} = \text{Beginning Inventory} + \text{Purchases} $

Example: $ \text{Cost of Goods Available for Sale} = 7000 + 2500 $

Cost of Goods Available for Sale: The total cost of inventory available for sale during the period
Beginning Inventory: The value of inventory at the start of the period
Purchases: The cost of additional inventory purchased during the period