During its first year of operations,a company that incurred $1,000 in production costs reported cost of goods sold of $800 and selling costs of $100.The company's ending finished goods inventory was $300.

Question

Quizplus · Accepted Answer

The cost of goods sold (COGS) plus the ending finished goods inventory should equal the total production costs plus the beginning finished goods inventory (which is not mentioned but typically assumed to be zero in this kind of problem unless stated otherwise). Here, $800 (COGS) + $300 (ending inventory) = $1,100, which does not match the $1,000 production costs.

During Its First Year of Operations,a Company That Incurred $1,000