Cost of Goods Sold May Be Computed by

question 89

Multiple Choice

Cost of goods sold may be computed by

• A) adding beginning inventory and ending inventory together.
• B) subtracting ending inventory from cost of goods available for sale.
• C) subtracting beginning inventory from cost of goods available for sale.
• D) adding beginning inventory to cost of goods available for sale.
• E) subtracting beginning inventory from net purchases.

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Definitions:

Cost Per Equivalent Unit

A calculation used in process costing, dividing the total cost by the number of units produced to determine the cost per unit.

Conversion Costs

Costs required to convert raw materials into finished products, usually including direct labor and manufacturing overhead.

Conversion Costs

The costs required to convert raw materials into finished goods, which typically include direct labor and manufacturing overhead.

Total Cost Transferred

The aggregate expense shifted from one account or department to another, often used in manufacturing to denote the total cost moved from work in process to finished goods.