The formula for cost of goods sold for a manufacturer is

Question

Quizplus · Accepted Answer

Cost of goods sold for a manufacturer is calculated by adding the cost of goods manufactured during the period to the beginning finished goods inventory and then subtracting the ending finished goods inventory. This formula takes into account the cost of goods that were completed during the period but were not sold and the cost of goods that were sold during the period. Option B is incorrect because it is the formula for calculating the cost of goods manufactured. Option C and D are incorrect because they only calculate the cost of materials, labor, and overhead, but do not take into account the inventory levels of finished goods.

The Formula for Cost of Goods Sold for a Manufacturer