In a typical production process, the physical flows for a manufacturer are:
A)Work-in-Process Inventory→Material Inventory→Finished Goods Inventory→Cost of Goods Sold.
B)Material Inventory→Cost of Goods Sold→Finished Goods.
C)Material Inventory→Work-in-Process inventory→Finished Goods Inventory→Cost of Goods Sold.
D)Finished Goods Inventory→Cost of Goods Sold→Material Inventory
E)None of the above.

Question

Quizplus · Accepted Answer

Material Inventory is first converted into Work-in-Process Inventory during the manufacturing process. Once the manufacturing process is complete, the Work-in-Process Inventory is converted into Finished Goods Inventory. Finally, when the finished goods are sold, they are recorded as Cost of Goods Sold.

In a Typical Production Process, the Physical Flows for a Manufacturer