The cost of goods manufactured is computed by

Question

Quizplus · Accepted Answer

The cost of goods manufactured is the total cost of producing finished goods from raw materials during a period. It is computed by deducting the ending work in process inventory from the sum of the total manufacturing costs and the beginning work in process inventory. This formula takes into account the direct materials, direct labor, and overhead costs incurred to produce the goods during the period. Option A only takes into account direct materials, direct labor, and manufacturing overhead without factoring in work in process inventory, and option D includes operating expenses which are not included in the cost of goods manufactured formula. Option C is referring to the calculation of cost of goods sold, not cost of goods manufactured.

The Cost of Goods Manufactured Is Computed by