Cost of goods sold (COGS) refer to the inventory costs of those goods a business has sold during a particular

period. Costs are associated with particular goods using one of several formulas, including specific identification, first-in first-out (FIFO), or average cost. Costs include all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Costs of goods made by the business include material, labor, and allocated overhead. The costs of those goods not yet sold are deferred as costs of inventory until the inventory is sold or written down in value. The cost of goods manufactured is composed of material and production costs, process costs and overhead (such as material and production overhead). The cost of goods sold consists of the cost of goods manufactured together with sales and administration overhead costs. In SAP COGS is calculated using product cost planning

Product Cost Report: Product cost report is a report which details the cost of manufacturing a unit of finished product. It consists of direct cost ( Material, Labour and Direct Factory Overhead) and indirect Overheads. In SAP, the purpose of product costing is to plan the cost of a product, and compare the actual with the standard to perform variance analysis. There are a number of standard report available in SAP. The SAP product Cost information system also provides a range reports for product cost planning, product cost by period, by order, by sales order and actual costs.

Financial Statements: