On the income statement of a manufacturing company,what replaces purchases in the cost of goods sold section of a retail company?
A) finished goods
B) cost of merchandise available
C) cost of goods manufactured
D) work in process

Question

Quizplus · Accepted Answer

In the cost of goods sold section of a manufacturing company, the cost of goods manufactured replaces purchases in a retail company. This is because a manufacturing company produces its own goods whereas a retail company purchases its goods to sell. The cost of goods manufactured includes the cost of direct materials, direct labor, and overhead expenses incurred during the manufacturing process.

On the Income Statement of a Manufacturing Company,what Replaces Purchases