If the Work in Process Inventory Has Increased During the Period

question 3

Multiple Choice

If the work in process inventory has increased during the period, which of the following statements is definitely true?

• A) Cost of goods sold will be greater than cost of goods manufactured.
• B) Cost of goods manufactured will be greater than cost of goods sold.
• C) Total manufacturing costs for the period will be greater than cost of goods manufactured.
• D) Total manufacturing costs for the period will be less than cost of goods manufactured.

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Definitions:

Oral Contract

A verbal agreement between parties that is legally binding, although difficult to prove in court without witnesses or supporting documentation.

Written Confirmation

A document that provides proof of an agreement or transaction, detailing the specific terms and conditions agreed upon by the parties involved.

Finance Leases

A type of lease where the lessee has use of the asset for most of its useful life and the lease payments are designed to cover the full cost of the asset, along with interest.

Truth In Lending Act

A U.S. federal law designed to promote informed use of consumer credit by requiring disclosures about its terms and cost.