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Cost of Goods Manufactured

Cost of Goods Manufactured (COGM) in PrismERP is a key production accounting feature that calculates the total cost incurred to manufacture products during a specific period. It includes the cost of raw materials, direct labor, and manufacturing overheads applied during production.

PrismERP tracks COGM by integrating Bill of Materials (BOM), production orders, labor, and overhead costs, ensuring every cost element is accurately captured. This allows businesses to determine the total production cost for finished goods, which is essential for financial reporting, pricing, and profitability analysis.

By comparing COGM with Cost of Goods Sold (COGS), companies can assess inventory valuation, monitor production efficiency, and identify areas for cost optimization. Detailed reports on material usage, labor allocation, and overhead distribution give production and finance teams a clear view of manufacturing costs.

With COGM tracking in PrismERP, manufacturers can improve budgeting, make informed pricing decisions, and maintain better control over production finances.

Key Features of COGM in PrismERP​

  • Integration with BOM and Production Orders: Automatically captures all costs from raw materials, labor, and overheads.

  • Accurate Cost Tracking: Monitors actual production costs against planned costs for real-time insights.

  • Detailed Reporting: Provides reports on material usage, labor allocation, overhead distribution, and production cost analysis.

  • Variance Analysis: Compare COGM with COGS to identify cost deviations and inefficiencies.

  • Audit Trail: Maintains a full record of all cost entries for financial transparency and compliance.

Benefits of Using COGM in PrismERP​

  • Better Cost Control: Understand total production costs to optimize resources and reduce waste.

  • Informed Pricing Decisions: Use accurate production costs to set competitive and profitable pricing.

  • Enhanced Financial Planning: Align manufacturing costs with budgeting and forecasting needs.

  • Improved Inventory Valuation: Accurately value finished goods for reporting and accounting.

  • Operational Efficiency: Identify high-cost operations and improve production workflows.