 company, or a company that just buys and sells inventory, because some things like utilities on the warehouse, some things like depreciation, we're not going to expense them as we had in the past, we're going to include them in the cost of production, we're going to include them in the cost of inventory. And that's gonna then we're going to subtract out the ending working process, what's still there, what's not completed yet. So we're going to count what's still in the ending working process and not yet done. And that will give us the cost of goods manufactured. So again, these two calculations, you can see of them of similar, they're similar in nature, meaning we had beginning working process, and then not purchases, but the materials used, and all the labor, these three items being what we added to it, what we made from it, we didn't buy it, we made it, we transferred over this, and then we added the labor and overhead, those are all costs that we put into it. We could then have a subcategory if we chose to, which would be work and process available, and then subtract out the ending work and process. So similar formulas that we have here, this time our bottom line number getting to cost of goods manufactured, not to be confused with cost of goods sold, cost of goods manufactured is what we made during this time period cost of goods sold is is going to be what we actually sold during this time period cost of goods manufactured will be used in the calculation for cost of goods sold, however, which would be the beginning inventory. I'm sorry, beginning the finished goods inventory. So now we're looking at the goods that are done now, the finished goods inventory. And then we're going to add to it the cost of goods manufactured, instead of as we would for a merchandiser, a company that just purchases and sells inventory, where this would be purchases. So this is the differing number here between those two, that's going to give us the goods available for sale, just a subcategory, this is what we could have sold during the time period. This is our calculation of cost of goods sold that we saw prior. And then that's going to give us our ending finished good. And then we're going to subtract from that, our ending finished goods inventory, which we could get from a physical account to finally get the cost of goods sold. Now notice we have the sales item here, the only the only area here that's going to be on the income statement is the cost of goods sold. And it's not the sales item, we don't know what we sold it for that were we we would, but these this flow doesn't track the sales price. The sales price has nothing to do directly with the cost of the goods sold, we might use the cost to derive the sales price. But this remember we're tracking the cost. So when we sell something, we're going to work if it's if it's a perpetual system, we're going to we're going to debit cash or debit accounts receivable credit sales revenue sales will be recorded. That's the part that's not here. We're also going to debit cost of goods sold the expense and reduce inventory. And that's in credit inventory. And that's what we are tracking here. This is going to be the cost of goods sold the expense portion of the sales we make when we make a sale, we have the related expense of cost of goods sold. Note that this expense this one time that we're finally hitting the income statement is comprised of all this activity that we've done, the direct materials are included in it, the direct labor is included in it, the overhead is included in it, all that stuff that we've been tracking this whole time and haven't been putting on the income statement at all. We've just been putting it on the balance sheet as just lumping it in together as part of inventory is finally being expensed all together as we sell it in the form of cost of goods sold.