How To Find Cost Of Goods Sold?

Start with beginning inventory

Add purchases made during the period

Add direct costs related to production or acquisition

Subtract ending inventory

Use the formula: COGS = Beginning Inventory + Purchases + Direct Costs – Ending Inventory

For manufacturers, use: COGS = Beginning Finished Goods Inventory + Cost of Goods Manufactured – Ending Finished Goods Inventory

For retailers, use: COGS = Beginning Inventory + Net Purchases – Ending Inventory

For service businesses, use direct labor and direct service costs instead of inventory-based costs