Formula of COST OF GOODS SOLD | Gross Profit and Net Profit | COGS | Class 11 Accounts

Understand the formula of cost of goods sold, gross profit and net profit in this video.
COGS = Opening stock + Net Purchases + Direct Expenses - Closing Stock
Cost of goods sold means the actual cost incurred on the value of goods which have been sold by the business. In the sense it means the cost price.
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CA Manish Mahajan is a first class commerce graduate from Panjab University, having done his graduation in B.Com (Finance Hons.) from GGDSD College, Chandigarh. He qualified Chartered Accountancy course in 2010 and was placed in merit list (31st All India Rank in Final and 22nd All India Rank in Foundation). He possesses a vast experience of more than 15 Years in teaching Accountancy, Economics and Mathematics to the students of Classes +1 and+2 and also mentored the students of B.Com and CA. He has authored the books on Accountancy, Economics and Indirect Tax Laws. His unique lecture delivery and practical method of teaching, helps the student to easily grasp and remember the subject.
This Channel provides all the educational content for the students of class 11 and class 12 for subjects Accounts and Economics. Here you get regular & organized content for complete course study.
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[@mistraxmusic001]

Ultra Legends Watching One day before accounts exam.😅😅😂😂😂

[@camanishmahajan]

Gr8. Hope u score well. 👍

[@uniqueskpagl]

Legend ultra pro max watching before 2 hours of exam😁

[@gamerbhushanff]

Tomorow is my paper of accounts and does not knowledge of COGS sums your COGS explane in very easy method thanks sir 🔥🔥

[@camanishmahajan]

That's great. Happy that u understood. Good luck Keep learning 👍

[@prashantgupta3648]

Sir apne apne bahut ache se direct expenses aur COGS ke concepts clear kiya h 🙏🙏🙏

[@camanishmahajan]

Thanks Prashant. Keep learning and keep growing 👍

[@TrendyVids-1989]

well explained,thanks....

[@ramkrishna-fj7ul]

Direct expenses mean wages in production of products in factory. Or in purchase of goods and bring to factory. Direct expenses mean only production and purchase expenses only

[@ramkrishna-fj7ul]

Indirect expenses mean salary. Indirect expenses not contribute directly in production or purchase of goods.

[@NavdeepKour-gs7do]

Thanks🙏

[@camanishmahajan]

You’re welcome 😊

[@abhijeet8662]

Namaste sir Dhanywad🙏🏻

[@aradhyam]

Nice class sir m grade1 ki preparation ker rhi hu 👏

[@camanishmahajan]

Thanks aradhya. Keep learning and keep growing with us👍

[@mathews4265]

Really well explained! Sir, could you please do a video on different types of financial statements ( SOCI, SOFP, CFS, SOCIE) explaining the purpose & line items of the statements. Thanks

[@camanishmahajan]

Thanks Mathew for the appreciation. Will look forward to doing so in future.

[@nirmalyahalder5822]

Need rectification of errors video sir. You are a true teacher.

[@camanishmahajan]

Yes. It will be uploaded in a couple of days. Stay tuned in. Keep learning 👍

[@ramkrishna-fj7ul]

COGS=OPENING STOCK+net purchase+direct expenses-closing stock

[@imkanadedevendra5269]

Thank you sir

[@camanishmahajan]

Keep learning and keep growing 👍

[@amitshinde7443]

Really helpful the way you explain in detail....

[@camanishmahajan]

Gr8 Amit. Keep learning form our channel and view our Playlist for more such concepts.👍

[@nehaahuja9985]

Really helpful sir..🙏

[@camanishmahajan]

Keep learning 👍

[@amitfromgurgaon2883]

thank you sir. You made it very clear to me. Please correct me if I'm wrong., "The electricity, wages, rent of a factory is also a direct expense and that adds to the COGS." Is that right sir?

[@camanishmahajan]

Yes it is right.

[@ShivamKumar-kt7kb]

Thanks

[@camanishmahajan]

Keep learning keep growing 👍

[@mompaul3678]

Very nice explanation. My doubts on this calculation part is absolutely clear now.

[@camanishmahajan]

Gr8 to hear that. Keep learning with us 👍

[@220patelsiddharth6]

Thank you very very much sir very well explained 💯💯

[@camanishmahajan]

Keep learning and growing 👍

[@foodie_madman7031]

Hello there, i need your help with this question. In 2021 company purchased direct raw material USD50,000, and direct labor cost USD21,000. Raw material opening 35,500 Raw material closing 12,900 Work in process opening 8,000 Work in proses closing 5,050 Finished goods Opening 7,075 Finished good Closing 6,475 Indirect Material 9,500 Indirect labor 7,450 Selling and administrative Expenses 3,370 Depreciation 1200 Utilities 1,100 Others 800 Prepare Cost of goods sold schedule for the company.

[@camanishmahajan]

Op RM 35500 + Purchase of RM 50000 - cl RM 12900 = RM consumed 72600 Op WIP 8000 + RM consumed 72600 + Direct labour cost 21000 - Cl WIP 5050 = cost of production 96550 Op FP 7075 + cost of production 96550 + ind materials 9500 + ind labour 7450 - cl FP 6475 = COGS 114100 COGS 114100 + selling and adm expense 3370 = cost of sales 117470 This is as per best of the information available. Assuming Indirect mat and labour to be a part of COGS. Depreciation, utilities and others are taken as Indirect expenses of business so not a part of COGS and COS. Hope it helps.

[@foodie_madman7031]

@@camanishmahajan hi sir, may I know what is OP?

[@camanishmahajan]

Op is opening, cl is closing

[@foodie_madman7031]

Hi sir. Can I have your WhatsApp number. I need more guidance. Pls...

[@foodie_madman7031]

@@camanishmahajan hi sir, after I checked with my friends, they told me "Do not include selling & administrative expenses into your manufacturing overhead ya.." so they get answer which is 117200

[@faizuzuv4950]

Sir, no words to thank u, although i have been preparing for competative xzams... sir plz 1 request it there, kindly bring a lec on BRS

[@camanishmahajan]

Ur welcome dear. Will surely be making the videos on brs and other topics. Stay tuned. Good luck👍

[@touhidulislam1052]

Nice sir

[@camanishmahajan]

Thanks dear. Keep learning 👍

[@sanatmondal2805]

Thank you very much sir ❤❤❤❤

[@camanishmahajan]

Thanks for the appreciation sanat. Keep learning 👍

[@parulgarg7971]

I'm impressed 🙋

[@camanishmahajan]

Thanks parul for the appreciation. Keep learning keep growing.👍

[@ramkrishna-fj7ul]

Net sale=sale on cash+sale on credit-sale return

[@ramkrishna-fj7ul]

Net profit=gross profit-indirect expenses

[@roshanmahapatra2985]

Thank u sir your explain is osm 👍🙏

[@camanishmahajan]

Thank you for the appreciation. Keep learning with us👍

[@ashivarshney2408]

Too good sir thnq so much😊

[@camanishmahajan]

Ur welcome. Stay tuned and keep learning with us.👍

[@ramkrishna-fj7ul]

Net sales-COGS= GROSS PROFIT

[@piyusshsoni9499]

Net purchase = without taxes or Purchase - Purchase Returns?

[@camanishmahajan]

Net purchases = gross purchase (-) purchase returns

[@upsidedownshield5408]

Very underrated channel

[@mahediHasan-fe9hf]

Dada can you example to multiple products & multiple foren products. Like the spare parts business.

[@camanishmahajan]

The concept of COGS will remain same for all types of finished goods meant for resale. You can apply the formula for all types of products separately to calculate COGS for each type of product and then add all to get total combined COGS.

[@mahediHasan-fe9hf]

@@camanishmahajan my difficulties is that my products is spare parts. Due to dollar fexactuation cost price is changes most of. I cant fix the sale price, we also loss. Which method can apply for the fixing the sale price.

[@ramkrishna-fj7ul]

Gross profit=net sales-COGS

[@asimkhadka2074]

Kindly request sir, please makes video of balance sheet and p/L account .

[@camanishmahajan]

Yes Asim. All the videos with relevant topics are being uploaded one by one. Will surely do it. Keep learning 👍

[@chetrajpandey8159]

Good

[@ramkrishna-fj7ul]

Gross profit vs ebit?

[@aliftamim7580]

Thank you 💖💖 sir

[@camanishmahajan]

Ur welcome. Keep learning👍

[@randomboy492]

good explanation sir

[@camanishmahajan]

Thank you and keep learning👍

[@wantedgamerz29]

Keep it up

[@ramkrishna-fj7ul]

Net sales= Revenue=amount came after selling of finished goods

[@realanish27]

sir please teach FINAL ACCOUNTS for CLASS 11

[@camanishmahajan]

Yes Anish. Will be teaching all concepts. Videos will come in the order of accounting process. Stay tuned in. Keep learning the basics first. 👍

[@realanish27]

@@camanishmahajan Thanks sir

[@ashishijardar1334]

Wonderful

[@camanishmahajan]

Thanks for the appreciation Ashish. 👍

[@touhidulislam1052]

Indirect income kyaa hai?

[@camanishmahajan]

Any income earned other than sales. Like interest received, commission received, rent received, discount received etc.

[@behappychildren1437]

Sir G minus Closing stock Q karte hai samjhe nhi aaya kiyo ki woh to hamre pass already hai or purchase ki to woh us closing stock mai plus ➕ kiyo nhi hota hai please reply today🙏🙏🙏

[@camanishmahajan]

Coz we are finding the value of only those goods which are sold. COGS is the cost of only those goods which have been sold. Therefore closing stock which is unsold is reduced from the total goods available for sale.

[@behappychildren1437]

@@camanishmahajan1/4/2021 To 31/3/2022 Tak jitna bhee goods sales kiya hai woh COGS or Jo 31March ko bacha hai woh closing right es liye closing ko Minus➖ karte hai correct✅ reply 🙏

[@camanishmahajan]

Correct 👍

[@behappychildren1437]

@@camanishmahajan Thanx for suggestion 👍

[@ramkrishna-fj7ul]

Cash flow ratio

[@ramkrishna-fj7ul]

Is Gross profit=EBIT=GROSS INCOME

[@camanishmahajan]

Gp is only a trading margin. Whereas Ebit is the net profit after all expenses but before interest expense and tax. So GP is essentially after direct expenses but before Indirect expenses. But Ebit is afyer all direct and Indirect expenses except interest.

[@sachinkumar-sv9xx]

Ultra legend pro Max watching 1 hour before exam.😂😂😂😂

[@camanishmahajan]

Good luck👍

[@nehasinghal6568]

Which book is it???

[@camanishmahajan]

All these are self written books and notes provided to students. Available with recorded lectures on our mobile app on playstore. Concepts Commerce Academy

[@nehasinghal6568]

@@camanishmahajan sir am from engineering background currently pursuing investment banking course and i want understand the basics, i was following your youtube videos and they are very helpful especially this one COGS. can you plz helpwhich books should i refer. cz the notes that you have shown in video is very good and to the point..

[@camanishmahajan]

Thanks for the appreciation. You can buy T.S grewal, Juneja chawla, Sandeep garg or dk goyal. All these are good books. I have used all these books myself and for teaching purposes.

[@nehasinghal6568]

Thankyou sir 👍

[@andrecamacho7660]

why dont you put the title in your language ???

[@waseemkhan2141]

Ultra legend watching on exam day

[@camanishmahajan]

Keep learning 👍

[@ramkrishna-fj7ul]

CAGR

[@subashbose3537]

Tamil or english pl

[@awadheshkumar6753]

Sir contact number mil jayega

[@harshitchandola7883]

Thanks sir

[@camanishmahajan]

Keep learning with us👍

[@sanjeevsahani8354]

Thank you sir

[@camanishmahajan]

Ur welcome Sanjeev. Keep learning👍