If finished goods inventory has increased during the period, which of the following is always true?
A)Cost of goods sold is less than cost of goods manufactured.
B)Cost of goods sold is more than cost of goods manufactured.
C)Cost of goods manufactured is more than total manufacturing costs.
D)Cost of goods manufactured is less than total manufacturing costs.

Question

Quizplus · Accepted Answer

When finished goods inventory increases, it means not all goods manufactured were sold. Therefore, the cost of goods sold (COGS) is less than the cost of goods manufactured (COGM) because COGS only includes the cost of the goods that were actually sold.

If Finished Goods Inventory Has Increased During the Period, Which