Select the appropriate definition for each of the items listed below.
-(direct materials + direct labour + overhead)+/− the change in work-in-process inventory from the beginning to the end of the current period
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

This equation represents the cost of goods manufactured, which is the total cost of producing goods during the current period. It includes direct materials, direct labour, and overhead, plus or minus any change in work-in-process inventory.

The other options are not applicable to this equation as: 
- Work-in-process inventory is only a part of the equation, not the entire result.
- Finished goods inventory is not included in this equation.
- Cost of goods sold is the cost of goods that have been sold during a period and is calculated separately.
- Total manufacturing costs include direct materials, direct labour, and overhead, but do not account for any change in work-in-process inventory.

Select the Appropriate Definition for Each of the Items Listed