Total manufacturing costs to account for during the year minus the ending Work-in-Process Inventory equals the cost of goods manufactured.

Question

Quizplus · Accepted Answer

This is the correct formula for calculating the cost of goods manufactured. Total manufacturing costs include direct materials, direct labor, and manufacturing overhead. Subtracting the ending work-in-process inventory from the total manufacturing costs gives us the cost of goods manufactured, which is the cost of the goods that were completed during the year.

Total Manufacturing Costs to Account for During the Year Minus