Before operating income can be determined for a manufacturer, which of the following is calculated?
A)Cost of goods available for sale
B)Cost of goods sold
C)Cost of goods manufactured
D)All of the above

Question

Quizplus · Accepted Answer

All of the options listed (A) Cost of goods available for sale, (B) Cost of goods sold, and (C) Cost of goods manufactured must be calculated before operating income can be determined for a manufacturer. Cost of goods available for sale includes both the cost of goods sold and the ending inventory, while cost of goods sold is the cost of the goods that were actually sold during the period. Cost of goods manufactured is the total cost of goods that were produced during the period, including direct materials, direct labor, and manufacturing overhead. All three of these factors are important in determining the operating income of a manufacturer.

Before Operating Income Can Be Determined for a Manufacturer, Which