What Does COGS Stand For?
COGS acts as an Acronym for the Cost of Goods Sold. The Cost of Goods sold is the value of the Goods that have been sold out. This cost is calculated by the following formula.
COGS Formula:
COGS = Opening Inv + Purchases - Closing Inventory
How find the Cost of goods sold?
we can calculate the value of COGS by solving the following Question
Example:
If you have sales of 50,000 and the opening inventory is 15000. The value of the Purchase of goods is 90000 and the closing inventory is 2000 what is the value of the Cost of Goods sold.
COGS Calculation:
Opening Inventory 15000
Purchases 9000
Cost of Goods available for sale 24,000
Less: Closing Inventory (2000)
Cost of Goods Sold 22,000
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