What sources of information does a manufacturing company use to determine cost of goods sold?
A)only the sales budget
B)only the cost of purchases budget
C)the materials budget, the labour budget, and the overhead budget
D)the sales and the cost of purchases budget

Question

Quizplus · Accepted Answer

Cost of goods sold is calculated by adding the direct materials, direct labor, and overhead costs incurred during the production process. Therefore, a manufacturing company would need to refer to the materials budget, labor budget, and overhead budget to determine their cost of goods sold. The sales budget and cost of purchases budget may provide information about revenue and expenses, but they do not provide complete information for calculating cost of goods sold.

What Sources of Information Does a Manufacturing Company Use to Determine