Accountancy Forum

Is raw materials considered Cost of Goods Sold, or an Inventory Asset?

For example, my business involves making custom baby blankets. We buy thread, fabric, etc.

Yes,it is included in cost of goods sold in
case of manufacturing company.
i.e

Raw material xxx
Direct Labour xxx
=====
Prime Cost xxxxx
=====

Prime cost is added in OHs to calculate
total cost of manufacturing companies.