What Can Be Said of the Relationship Between Total Manufacturing

question 76

Multiple Choice

What can be said of the relationship between total manufacturing costs and the cost of goods manufactured when work-in-process inventories decrease during the period? (Assume no change in per unit costs. )

• A)They are equal.
• B)Total Manufacturing Costs greater than Cost of Goods Manufactured
• C)Cost of Goods Manufactured greater than Total Manufacturing Costs
• D)Nothing can be said without additional information.

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Definitions:

Current Year

Refers to the present calendar year or fiscal year in which business operations and accounting transactions are being considered.

Direct Materials Budget

An estimation of the type and amount of materials required to meet production goals, along with the projected cost.

Quantity

The amount or number of a material or product, which can be measured or counted.

Cost Data

Information related to the expenses incurred in the production of goods or services, including material, labor, and overhead costs.