What is the primary benefit of estimating Cost of Goods Sold (COGS) during interim periods?

Estimating the Cost of Goods Sold (COGS) during interim periods offers the primary benefit of providing timely financial information. This is important because businesses often need to report their financial performance more frequently than just annually. By estimating COGS, a company can more promptly assess its profitability, manage its operations effectively, and make informed decisions regarding pricing, inventory management, and cash flow.

Timely financial information allows management to respond to trends and challenges in the market on an ongoing basis rather than waiting for year-end results. This proactive approach can enhance strategic planning and help in identifying areas for improvement.

While other factors like tax preparation and inventory accuracy are also significant in the context of financial reporting, they do not capture the essence of why interim COGS estimates are essential in providing ongoing insights into a company's performance.