Which of the Following Is the Correct Formula for Cost

question 28

Multiple Choice

Which of the following is the correct formula for cost of goods sold?

• A)Opening WIP inventory + cost of goods manufactured + ending WIP inventory.
• B)Opening WIP inventory - cost of goods manufactured = ending WIP inventory.
• C)Opening finished goods inventory - cost of goods manufactured + Ending finished goods inventory.
• D)Opening finished goods inventory + cost of goods manufactured - Ending finished goods inventory.
• E)None of the above.

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Definitions:

Seasonal Peaks

Times of the year when demand for a product or service is significantly higher than usual, often due to factors like holidays or weather.

Wasted Capacity

The portion of production capability or resources that goes unused or is not effectively utilized.

Margin Reduction

The decrease in the difference between the cost to produce a good or service and its selling price, often aiming to increase market competitiveness.

Backup Source

An alternative supplier or system used to ensure continuity in case the primary source fails or is unavailable.