Financial Statements:

 Cost of Goods Manufactured

 Cost of Goods Sold
 Income Statement
 Cost of Goods Manufactured
Statement (COGM)

• Cost of goods manufactured

(COGM) may also be expressed in
the form of an equation. This
equation is sometime referred to
as COGM formula:

COGM = Direct materials used + Direct labor used +

Factory overhead + Work in process opening
inventory - Work in process closing inventory
 Cost of Goods Sold (COGS)Statement:

• Cost of Goods Sold (COGS): Cost of

goods sold represents the sum of the
costs of all goods which have been sold
during the accounting period. It is
ascertained by adding the value of
unsold goods at the beginning of the
year (opening inventory or stock) to the
purchases made during the year and
then deducting the values of unsold
goods at the end of the year (closing
inventory of stock) from the purchases.
Given by the cost of goods sold formula:

COGS = Opening inventory + Purchases +

Direct expenses* - Closing inventory
 Cost Sheet or Statement of Cost for the period ended _____

Particulars Details(Rs.) Total (Rs.)

Opening Stock of Raw materials xxx

Add: Purchase of Raw Materials xxx

Add: Expense for Purchase of Raw Materials xxx
Less: Purchase Returns xxxx
Less : Sale of Stock xxxx
Less : Materials Destroyed xxxx
Less: Closing Stock of Raw materials xxxx xxx
MATERIALS CONSUMED XXX
Add : Direct Wages xxx
Add: Direct Expenses xxx
PRIME COST XXX
Add : Factory Overheads xxx
Add: Opening Work-in progress xxx
Less: Closing Work in Progress xxx
WORKS COST / FACTORY COST XXX
Add : Office & Administrative Overheads xxx
COST OF GOODS MANUFACTURED (COGM) XXX
Add: Opening Stock of Finished Goods xxx
Less: Closing Stock of Finished Goods xxx
COST OF GOODS SOLD (COGS) XXX
Add: Selling & Distribution Overheads, Ad expenses xxx
etc.
COST OF SALES / TOTAL COST XXX
Add: Profit (Balancing Figure or given rate) xxxx
 Income Statement

• An income statement
shows the results of
operating for a period of
time. It is sometimes called
operating statement or
statement of operations. It
shows how well an
organization performed
during the period covered.
 Revenue = Amount received in cash + Receivable

INCOME = REVENUE – DIRECT & INDIRECT EXPENSES