Examples Demonstrating COGS

[mstakh.i.mo.mi]

In your company’s financial reports, COGS shows up as one of the top accounting metrics. You’ll usually spot it just below your sales or income figures on your profit and loss statement. COGS is not just some static number. It’s flexible and changes based on the sales period you’re looking at. It could be a whole year, a quarter, or even just a month.

If you’re in the business of manufacturing goods and selling them or buying products and reselling them, you’ll have to calculate your cost of goods sold. This COGS figure is going to have a big impact on how much tax you need to pay.

You need to apply a simple formula to get your cost of goods sold. Take your peru phone number list end-of-year value and subtract it from your start-of-year value, you’ve got your COGS.


Let’s say the following is the inventory status of a business:

Beginning Inventory: ₹20,50,000
Purchases: ₹24,60,000
Goods Available for Sale: ₹20,50,000 + ₹24,60,000 = ₹45,10,000
Ending Inventory: ₹12,30,000
Cost of Goods Sold= Beginning Inventory + Purchases – Ending Inventory

= ₹45,10,000 – ₹12,30,000

= ₹32,80,000

Elements Included in COGS
Here are the factors that contribute to the cost of goods sold:

Price of items you want to resell
Expense for your raw materials
Cost of the parts you use to manufacture a product
Direct labour charges
Container fees
Supplies utilised in either producing or selling the product
Overhead costs, like utilities for the production site and more.