Cost Of Goods Manufactured Normally we calculate Cost of Goods Manufactured (CGM) as:
Raw Material used + Direct Labor + Manufacturing Overhead applied = Total Manufacturing Cost / Total Factory Cost + Opening WIP - Closing WIP
which gives us the result of COST OF GOODS MANUFACTURED (CGM). But in process costing, to calculate CGM we use different formulas under different methods.
Under the Weighted average method we use:
Cost of Opening WIP + Current period cost
Under the FIFO Method we use:
Current Period Cost Only My question is why don't we deduct Closing WIP in the process costing methods?
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