The cost of goods manufactured

Question

Quizplus · Accepted Answer

The cost of goods manufactured represents the total manufacturing costs (direct materials, direct labor, and manufacturing overhead) incurred to produce finished goods. This cost is recorded as a debit to the Finished Goods Inventory account, which is an asset account that reflects the cost of goods that are ready for sale but have not yet been sold. The cost of goods sold, on the other hand, refers to the cost of goods that have been sold and is recorded as an expense. Therefore, option C is the correct choice as it accurately describes where the cost of goods manufactured is recorded.

The Cost of Goods Manufactured