Cost of Sales Calculator

Formula

The formula to calculate the Cost of Sales (COS) is:

\[ \text{COS} = \text{BI} + \text{R} + \text{DL} + \text{OM} - \text{EI} \]

Where:

$ \text{COS} $ is the cost of sales ($)
$ \text{BI} $ is the value of the beginning inventory ($)
$ \text{R} $ is the value of the raw material ($)
$ \text{DL} $ is the cost of direct labor ($)
$ \text{OM} $ is the overhead manufacturing cost ($)
$ \text{EI} $ is the ending inventory value ($)

What is Cost of Sales?

A cost of sales is defined as the total value of costs involved in the production of a good or service. It is a variable metric that depends on factors such as raw material costs, direct labor costs, and more.

Example Calculation

Let's assume the following values:

Beginning Inventory (BI) = $10,000
Raw Material (R) = $5,000
Direct Labor (DL) = $3,000
Overhead Manufacturing Cost (OM) = $2,000
Ending Inventory (EI) = $4,000

Using the formula to calculate the Cost of Sales:

\[ \text{COS} = 10000 + 5000 + 3000 + 2000 - 4000 = 16000 \text{ dollars} \]

The Cost of Sales is $16,000.00.