What Are COGS and COGM?
COGS is the acronym for cost of goods sold and COGM is the acronym for cost of goods manufactured. Understanding the formula for calculating these is essential to determine not only pricing your products but also your net and gross profits.
Often, business owners really don’t know the formulas involved in determine COGS or COGMs and not knowing can be detrimental to your business and its financial state. Price goods too low and you won’t make a profit. If you don’t account for one element such as labor, you may set your price incorrectly and then find you’re sinking!
Here at Bright Hub, we understand that determining these formulas isn’t a favorite and is often a dilemma to most entrepreneurs, so here we’ve put together a library of articles to make you an expert at both COGS and COGM. We’ve even included some great tips and templates you can use to get started. Finally, once you’re an expert on these formulas, we’ve offered some income and expense template forms to aid you in predictions, forecasting and marketing your product and services.