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The main difference between the cost of goods sold of a manufacturer and a merchandiser is that the manufacturer includes cost of goods manufactured rather than cost of goods purchased.
Cost of Goods Sold
The direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor directly used to create the product.
Cost of Goods Manufactured
The total cost of all materials, labor, and overhead used to produce goods during a specific period.
Cost of Goods Purchased
The total expense incurred by a company to buy the goods it has sold or will sell, excluding any indirect costs.
- Gain insight into the diverse types of costs incurred in production, such as direct materials, wages for labor directly involved in manufacturing, and overhead expenses, and their role in determining the cost of goods sold.
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Learning Objectives
- Gain insight into the diverse types of costs incurred in production, such as direct materials, wages for labor directly involved in manufacturing, and overhead expenses, and their role in determining the cost of goods sold.
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