Cost of Goods Sold Calculator

Calculate COGS





Formula

The formula to calculate the Cost of Goods Sold (COGS) is:

\[ \text{COGS} = B + P - E \]

Where:

What is Cost of Goods Sold (COGS)?

Cost of Goods Sold (COGS) represents the direct expenses incurred in producing or acquiring the goods a company sells. This includes materials, labor, and overhead costs directly tied to the production or purchase of inventory items. COGS is crucial for assessing a company's profitability as it directly impacts the gross profit.

Example Calculation

Let's consider an example:

Using the formula to calculate COGS:

\[ \text{COGS} = 5,000 + 15,000 - 4,000 = 16,000 \]

This means that the Cost of Goods Sold in this scenario is $16,000.