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## About this lesson

A continuation of an explanation of how to build COGS into the financial statement.

## Exercise files

Download this lessonâ€™s related exercise files.

COGS Part 5 (Inventory).xlsm99.9 KB COGS Part 5 (Inventory) - Solution.xlsm

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## Quick reference

### COGS Part 5 (Inventory)

Understand COGS.

### When to use

When constructing a basic financial model.

### Instructions

The next stage in calculating Inventory - Wastage needs to be calculated:

- The Inventory balance pre-wastage is taken from ‘Inventory on Hand’
**=SUM(J127:J129)** - The wastage percentage is taken from row 101
**=J101** - The wastage is the product of the two lines above
**=J111*J112**

The Wastage can now be entered into the Control Account:

To work out the COGS the Inventory balance pre-COGS transfer needs to be worked out:

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