In a Merchandising Firm,the Computation of Cost of Goods Sold

question 83

Multiple Choice

In a merchandising firm,the computation of Cost of Goods Sold does NOT use ________.

• A) Merchandise Inventory, beginning balance
• B) Merchandise Inventory, ending balance
• C) purchases of raw materials
• D) purchases of merchandise inventory

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Definitions:

Variable Overhead

Costs that vary with production volume but cannot be traced directly to each unit produced, such as utilities for the manufacturing plant.

Supplies Variance

The difference between the budgeted cost of supplies and the actual cost incurred.

Materials Price Variance

The difference between the actual cost of materials used in production and the expected (or standard) cost, which can indicate changes in market prices or issues with budgeting.

Raw Material

Basic materials that are used in the production process to manufacture goods.