The total cost of direct materials, direct labor, and factory overhead transferred from the Work-in-Process Inventory account to the Finished Goods Inventory account during an accounting period is:

Question

Quizplus · Accepted Answer

Cost of goods manufactured represents the total cost of direct materials, direct labor, and factory overhead that has been applied to the units completed during the accounting period. This cost is then transferred from Work-in-Process Inventory to Finished Goods Inventory once the goods are completed, making D the correct choice. Options A, B, C, and E all refer to different measures of the cost of goods sold, but none directly relate to the transfer of costs from Work-in-Process Inventory to Finished Goods Inventory.

The Total Cost of Direct Materials, Direct Labor, and Factory