The cost of finished goods manufactured will exceed the cost of goods sold whenever:

Question

Quizplus · Accepted Answer

The cost of finished goods manufactured includes the total cost of the goods produced during the period, including direct materials, direct labor, and manufacturing overhead. If the inventory of finished goods increases over the period, it means that the cost of goods manufactured during the period exceeded the cost of goods sold, as some of the finished goods were not sold and remained in inventory. Therefore, the cost of finished goods manufactured will exceed the cost of goods sold.

The Cost of Finished Goods Manufactured Will Exceed the Cost