A manufacturer's total cost of making and finishing products in the period is called:
A) Cost of goods sold.
B) Ending work in process inventory.
C) Cost of goods manufactured.
D) Ending finished goods inventory.
E) Total manufacturing costs.

Question

Quizplus · Accepted Answer

Cost of goods manufactured represents the total cost incurred by the manufacturer during the period for making and finishing products, including direct materials, direct labor, and manufacturing overhead. This cost is then transferred to finished goods inventory and eventually recognized as cost of goods sold when the products are sold. Option A (Cost of goods sold) represents the cost incurred when the products are sold, Option B (Ending work in process inventory) represents the cost of partially completed products at the end of the period, Option D (Ending finished goods inventory) represents the cost of completed products that have not yet been sold, and Option E (Total manufacturing costs) represents the sum of all costs incurred in the manufacturing process.

A Manufacturer's Total Cost of Making and Finishing Products in the Period