Select the appropriate definition for each of the items listed below.
-Direct materials + direct labour + overhead
A)Work-in-process inventory
B)Finished goods inventory
C)Cost of goods sold
D)Cost of goods manufactured
E)Total manufacturing costs

Question

Quizplus · Accepted Answer

Direct materials, direct labour, and overhead are all components of total manufacturing costs.

Answer: A
 Work-in-process inventory refers to products that are partially completed but not yet finished. The cost of these products includes direct materials, direct labour, and overhead.

Answer: D
 Cost of goods manufactured refers to the total cost of making and completing products. It includes direct materials, direct labour, and overhead, as well as any beginning work-in-process inventory and minus ending work-in-process inventory.

Answer: C
 Cost of goods sold refers to the cost of making and selling products. It includes direct materials, direct labour, and overhead, as well as any beginning finished goods inventory and minus ending finished goods inventory.

Answer: B
 Finished goods inventory refers to products that are completed and ready to be sold. The cost of these products includes direct materials, direct labour, and overhead.

Select the Appropriate Definition for Each of the Items Listed