If the cost of goods sold is greater than the cost of goods manufactured, then:

Question

Quizplus · Accepted Answer

If the cost of goods sold is greater than cost of goods manufactured, it means that the company has sold more goods than it has produced during the period. This can only happen when the finished goods inventory at the beginning of the period was higher than the finished goods inventory at the end of the period. Therefore, finished goods inventory has decreased during the period.

If the Cost of Goods Sold Is Greater Than the Cost