Total manufacturing costs and the change in the Work in Process Inventory are used to compute the cost of goods sold.

Question

Quizplus · Accepted Answer

Total manufacturing costs and the change in the Work in Process Inventory are used to compute the Cost of Goods Manufactured, not the Cost of Goods Sold. The Cost of Goods Sold is calculated by subtracting the ending Finished Goods Inventory from the Cost of Goods Manufactured and adding the beginning Finished Goods Inventory.

Total Manufacturing Costs and the Change in the Work in Process