A company that incurred $1,000 in production costs reported cost of goods sold of $800 and selling costs of $100. Its ending finished goods inventory was $300.

Question

Quizplus · Accepted Answer

The cost of goods sold plus the ending finished goods inventory should equal the total production costs, but in this case, $800 + $300 = $1,100, which is higher than the $1,000 in production costs reported by the company. There seems to be an error in the company's financial statements.

A Company That Incurred $1,000 in Production Costs Reported Cost