Which of the following describes the formula for cost of goods manufactured?
A) Direct materials used plus direct labor plus overhead minus beginning inventory of work- in-process plus ending inventory of work- in -process
B) Direct materials used plus direct labor plus overhead plus beginning inventory of work- in- process minus ending inventory of work- in- process
C) Beginning inventory of raw materials plus purchases of raw materials less ending inventory raw materials
D) Beginning inventory of finished goods plus purchases of direct materials less ending inventory of finished goods

Question

Quizplus · Accepted Answer

The formula for the cost of goods manufactured is the total manufacturing costs (which include direct materials used, direct labor, and manufacturing overhead) added to the beginning inventory of work-in-process, and then subtracting the ending inventory of work-in-process. This calculation gives the total cost of goods that were completed during the period.

Which of the Following Describes the Formula for Cost of Goods