What Inventories Are Included in Determining the Cost of Goods

question 103

Multiple Choice

What inventories are included in determining the cost of goods sold?

• A)Beginning and ending finished goods
• B)Beginning and ending raw materials
• C)Beginning and ending work-in-process
• D)None of these answers are correct.

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Definitions:

Direct Labor Costs

The total of all wages, benefits, and taxes paid to employees who are directly involved in the manufacturing of products.

Work in Process

Goods that are in various stages of the production process but are not yet completed.

Standard Cost Card

A document listing the standard costs associated with manufacturing a product, including labor, materials, and overhead.

Standard Cost System

A standard cost system estimates the costs of production in advance, using standard rates for materials and labor to assess efficiency and performance.