Where Do Inventory and Cost of Sales Appear

question 6

Multiple Choice

Where do Inventory and Cost of sales appear?

• A)On the balance sheet and income statement,respectively
• B)On the income statement and cash flow statement,respectively
• C)On the balance sheet and statement of changes in equity,respectively
• D)On the statement of changes in equity and income statement,respectively

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Definitions:

Markup

The amount added to the cost of a product to create a price point that ensures profit for the company.

Selling Prices

The price at which goods or services are offered to buyers, determined by various factors including cost, demand, and competition.

Machine-Hours

A measure of the time machines are run, used in allocating manufacturing overhead to products.

Manufacturing Overhead

All manufacturing costs that are not directly associated with the production of a product or service.