If the ending finished goods inventory is greater than the beginning finished goods inventory, the cost of goods sold will be higher than the cost of goods manufactured.

Question

Quizplus · Accepted Answer

If the ending finished goods inventory is greater than the beginning finished goods inventory, it means that fewer goods were sold during the period, resulting in a lower cost of goods sold. The cost of goods sold is calculated by subtracting the ending finished goods inventory from the cost of goods manufactured, so if the ending inventory is higher, the cost of goods sold will be lower.

If the Ending Finished Goods Inventory Is Greater Than the Beginning