Hi! I also have problems computing the value of COGM. Should we add to direct labor the salaries and wages of the selling costs and the administrative costs? Because I thought that, since we are calculating the cost of goods manufactured, we would only consider for the direct labor the salaries and wages of the manufacturing costs.
Hello Inês,
You are correct in thinking we only account for the salaries and wages of the manufacturing costs when finding direct labor. The problem here you probably faced was the fact that the value you have for Salaries and wages that are Manufacturing Costs. Therefore, you need to remove the Real Social Charges to find the base wages and then add the Theoretical Social Charges at a rate of 60%.
Hope this helps!
Pedro Perdigão
You are correct in thinking we only account for the salaries and wages of the manufacturing costs when finding direct labor. The problem here you probably faced was the fact that the value you have for Salaries and wages that are Manufacturing Costs. Therefore, you need to remove the Real Social Charges to find the base wages and then add the Theoretical Social Charges at a rate of 60%.
Hope this helps!
Pedro Perdigão