Which of the following is the correct flow of costs in a manufacturing operation?
A)Raw materials to finished goods to COGS
B)Raw materials to COGS to finished goods to work-in-process
C)Raw materials to work-in-process to finished goods to COGS
D)Direct materials to work-in-process to finished goods to COGS

Question

Quizplus · Accepted Answer

The correct flow of costs in a manufacturing operation is from raw materials to work-in-process, from work-in-process to finished goods, and finally from finished goods to cost of goods sold. This sequence accurately reflects the manufacturing process where raw materials are added to work-in-process, labor and overhead costs are incurred, and finished goods are produced. Only once the finished goods have been sold do they become a cost of goods sold.

Which of the Following Is the Correct Flow of Costs