In a traditional enterprise, the flow of costs through the system is
A)materials inventory, work-in-process inventory, finished goods inventory, cost of goods sold.
B)materials inventory, work-in-process inventory, cost of goods sold, finished goods inventory.
C)work-in-process inventory, materials inventory, finished goods inventory, cost of goods sold.
D)work-in-process inventory, materials inventory, finished goods.

Question

Quizplus · Accepted Answer

The correct flow of costs in a traditional manufacturing enterprise starts with materials inventory (raw materials), moves to work-in-process inventory (goods that are in the process of being manufactured), then to finished goods inventory (completed goods ready for sale), and finally to cost of goods sold (the cost of the inventory that was sold). This sequence reflects the stages of production and sales in a manufacturing business.

In a Traditional Enterprise, the Flow of Costs Through the System