Refer to the T-account below:
Entry (12)could represent which of the following?
A) Direct labor cost incurred in production.
B) Purchases of raw materials.
C) The cost of goods manufactured transferred to Finished Goods.
D) The cost of indirect materials incurred in production.

Question

Refer to the T-account below:
 Entry (12)could represent which of the following?
A) Direct labor cost incurred in production. 
B) Purchases of raw materials. 
C) The cost of goods manufactured transferred to Finished Goods. 
D) The cost of indirect materials incurred in production.

Quizplus · Accepted Answer

Entry (12) represents the cost of goods manufactured transferred to Finished Goods. This is because the cost of goods manufactured is the total cost of producing finished goods, including direct materials, direct labor, and manufacturing overhead. Once the production is completed, the cost of goods manufactured is transferred to Finished Goods inventory. Therefore, option C is the best choice. The other options are incorrect because they do not capture the same meaning as the cost of goods manufactured transferred to Finished Goods as represented by entry (12) in the T-account.

Refer to the T-Account Below