Cost of Goods Manufactured (COGM) Calculator
Calculate the total cost of everything your production floor finished this period.
COGM = Beginning WIP + (Direct Materials + Direct Labor + Overhead) − Ending WIP
Total Manufacturing Costs
$80,000.00
Cost of Goods Manufactured
$78,000.00
The formula
COGM starts with whatever was already in progress at the beginning of the period, adds everything spent on production during the period, and backs out whatever is still in progress at the end:
COGM = Beginning WIP + (Direct Materials + Direct Labor + Overhead) − Ending WIP
Worked example
Say a manufacturer started the month with $8,000 of work-in-process inventory. During the month, they used $40,000 of direct materials, paid $25,000 in direct production labor, and allocated $15,000 of manufacturing overhead (factory rent, utilities, and supervisor pay). At month-end, $10,000 of partially completed production remained in WIP.
Total Manufacturing Costs = $40,000 + $25,000 + $15,000 = $80,000
COGM = $8,000 + $80,000 − $10,000 = $78,000
That $78,000 is the cost of every unit that was completed and moved into finished goods inventory during the month — separate from whatever portion of it was actually sold.
From COGM to COGS
COGM feeds directly into cost of goods sold: COGM becomes an addition to finished goods inventory, and COGS pulls from that same pool as units sell. Use the COGS calculator next to see how finished goods inventory levels turn this period's COGM into the cost of what actually shipped.
Related terms
See the full definitions of WIP (Work in Progress) and COGS in the glossary, or read Work-in-Progress (WIP) Valuation Explained for Manufacturers and Cost of Goods Sold (COGS) Explained.
Frequently asked questions
What is Cost of Goods Manufactured (COGM)?
Cost of Goods Manufactured is the total cost of all products a manufacturer finished during a period — direct materials, direct labor, and manufacturing overhead consumed in production, adjusted for work-in-process (WIP) inventory at the start and end of the period. It answers 'what did it cost to complete these goods,' regardless of whether they've been sold yet.
How is COGM different from COGS?
COGM measures the cost of goods finished during the period; COGS measures the cost of goods actually sold during the period. They differ whenever finished goods inventory changes — COGM flows into finished goods inventory, and COGS is drawn back out of it as items sell. The relationship is: COGS = Beginning Finished Goods + COGM − Ending Finished Goods.
What counts as manufacturing overhead?
Manufacturing overhead includes indirect production costs that aren't direct materials or direct labor — factory rent and utilities, equipment depreciation, indirect labor like supervisors and quality inspectors, and maintenance. It excludes selling, general, and administrative expenses, which never belong in COGM.
Where do I get my WIP inventory numbers?
Beginning WIP is your ending WIP from the previous period. Ending WIP requires either a physical count of partially completed production runs or a system that tracks WIP value automatically as materials are consumed and labor is applied mid-run. Nstock tracks WIP value per production run in real time, so ending WIP is a live number instead of a period-end estimate.
Get WIP and COGM tracked automatically
Nstock tracks WIP value per production run in real time and rolls direct materials, labor, and overhead into cost automatically — so COGM is always current instead of a period-end spreadsheet exercise.