The cost of goods sold will often differ from the cost of goods manufactured because of changes in the level of finished goods.

Question

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The cost of goods manufactured is the total cost of all the goods that were completed during the accounting period, while the cost of goods sold is the cost of the goods that were actually sold during the same period. These two amounts can differ because there may be changes in the level of finished goods that were not sold during the period.

The Cost of Goods Sold Will Often Differ from the Cost