Managers compute the cost of goods sold in a manufacturing entity as:
A)beginning work-in-process inventory + Cost of goods manufactured - Ending work-in-process inventory = Cost of goods sold.
B)beginning work-in-process inventory + Cost of goods manufactured + Ending work-in-process inventory = Cost of goods sold.
C)cost of goods manufactured - Beginning finished goods inventory - Ending finished goods inventory = Cost of goods sold.
D)cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory = Cost of goods sold.
E)cost of goods manufactured - Beginning finished goods inventory + Ending work-in-process inventory = Cost of goods sold.

Question

Quizplus · Accepted Answer

The correct formula for calculating the cost of goods sold in a manufacturing entity is: Cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory. This formula accounts for the total cost of goods available for sale during the period and subtracts the goods that were not sold by the end of the period (ending inventory) to determine the cost of goods actually sold.

Managers Compute the Cost of Goods Sold in a Manufacturing