COGM predominantly transfers into which account?

Cost of Goods Manufactured (COGM) represents the total costs incurred to produce goods during a specific period. This amount is crucial in understanding how much product is available for sale. COGM predominantly transfers into the Finished Goods account, which reflects the cost of products that are completed and ready to be sold. When production is completed, the costs are moved out of the Work in Progress account, where costs accumulate for materials, labor, and overhead that are partially completed, and allocated into Finished Goods. This movement signifies that these goods are now available for sale to customers.

Once the goods in Finished Goods are sold, their costs will then be transferred to the Cost of Goods Sold account, representing the expense for products that have been sold during a specific period. However, the primary transfer of COGM happens into the Finished Goods account, as it indicates goods available for sale after production is complete.