Cost of goods sold plus the ending finished goods inventory minus the beginning finished goods inventory equals the cost of goods manufactured.This statement works backwards from cost of goods sold to cost of goods manufactured.

Question

Quizplus · Accepted Answer

This is a commonly used formula in accounting and costing to calculate the cost of goods manufactured. By subtracting the beginning finished goods inventory from the sum of cost of goods sold and ending finished goods inventory, we can calculate the amount of cost that was allocated to the finished goods during the period, also known as the cost of goods manufactured.

Cost of Goods Sold Plus the Ending Finished Goods Inventory