Difference Between Cost of Goods Sold And Cost of Goods Manufactured
The main or primary difference between cost of goods manufactured and Cost of Goods Sold or Cost of Sales is that cost of goods manufactured is the cost of goods manufactured from raw material to work i n process while cost of goods sold is the cost of finished goods incurred to sell these ready-made goods or products to end customers. Cost of Goods Sold or Cost of Sales is the direct cost of production incurred to sell the products or finished goods ultimately to end customers while cost of goods manufactured is the cost of direct material, direct labor and all costs related to factory or manufacturing process but does not include indirect labor and indirect costs not related to the production or manufacturing or factory expenses. Trading company calculates Cost of goods sold for finished goods purchased from manufacturing company while cost of goods manufactured is calculated only by manufacturing company or producing company. ...