COGS Calculator

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Finance

Calculate Cost of Goods Sold (COGS) using beginning inventory, purchases, and ending inventory.

Formula

COGS = Beginning Inventory + Purchases − Ending Inventory
  • COGS measures the direct costs attributable to goods sold.
  • Gross Profit = Revenue − COGS.
  • Gross Margin % = Gross Profit / Revenue × 100.

Retailer with standard inventory flow

Inputs
  • Beginning Inventory: 50000 $
  • Purchases / Manufacturing Cost: 200000 $
  • Ending Inventory: 40000 $
  • Revenue (for gross margin): 350000 $

COGS = 50,000 + 200,000 − 40,000 = $210,000. Gross profit = 350,000 − 210,000 = $140,000 (40% margin).

Frequently asked questions

What is COGS?
Cost of Goods Sold — the direct costs of producing or acquiring the goods a company sold during a period.
What is included in COGS?
Raw materials, direct labor, manufacturing overhead. Excludes indirect costs like marketing and admin.
Why does COGS matter?
It is deducted from revenue to get gross profit, which drives profitability analysis.
Does COGS include shipping?
Inbound shipping (to receive goods) is typically included; outbound shipping is often classified as selling expense.