The cost of goods manufactured is included in the cost of goods available for sale in a manufacturing company

Question

Quizplus · Accepted Answer

The cost of goods manufactured includes the direct materials cost, direct labor cost, and manufacturing overhead cost, and it is then added to the beginning inventory of finished goods to calculate the cost of goods available for sale. The cost of goods sold is then calculated by subtracting the ending inventory of finished goods from the cost of goods available for sale. Therefore, the flow of direct materials cost, direct labor cost, and manufacturing overhead cost is included in the cost of goods manufactured and the cost of goods available for sale.

The Cost of Goods Manufactured Is Included in the Cost