Hello,
In simple terms we do standard costing to find out the cost of COGM and COGS basically we do this for manufacturing products in simple terms.
say a Air condition (non order related cogm/cogs)= Initially we do not know the cost of COGM/COGS
to arrive a standard costing we estimate the cost by using standard costing
Panel- $100
Filter-$100
Labour hours-$100 ($20 for 5hours)
Machine Hours-$100 ($50 for 2 hours)
Marketing Cost- $100
So now the cost of goods manufactured is $400
and Cost of good sold is $500
Go through these 2 links it will be helpful.
http://help.sap.com/erp_hcm_ias_2012_03/helpdata/en/7e/cb81e043a311d189ee0000e81ddfac/content.htm
http://wiki.scn.sap.com/wiki/display/ERPFI/Product+Cost+Planning+%28CO-PC-PCP%29
I hope it helps
Cheers
Hrusikesh