Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

Financial Accounting

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

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Multiple Choice

Under variable costing, which of the following costs would be included in finished goods inventory?

All manufacturing and non-manufacturing costs

Direct materials, direct labor, variable and fixed manufacturing overhead

Direct materials, direct labor, and variable manufacturing overhead

Direct materials and direct labor only

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Verified step by step guidance

Understand the concept of variable costing: Variable costing includes only variable manufacturing costs in the cost of finished goods inventory. Fixed manufacturing overhead is treated as a period cost and is not included in inventory under this method.

Identify the components of variable manufacturing costs: These typically include direct materials, direct labor, and variable manufacturing overhead. Fixed manufacturing overhead and non-manufacturing costs are excluded.

Analyze the options provided: Evaluate each option to determine which costs align with the principles of variable costing. For example, 'All manufacturing and non-manufacturing costs' would not be correct because non-manufacturing costs are excluded.

Focus on the correct answer: The correct answer is 'Direct materials, direct labor, and variable manufacturing overhead,' as these are the costs included in finished goods inventory under variable costing.

Review the exclusions: Fixed manufacturing overhead and non-manufacturing costs are treated differently under variable costing, ensuring clarity on what is excluded from inventory.