Multiple Choice
Under variable costing, which manufacturing costs are treated as product costs?
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4. Merchandising Operations
Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory
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Which stage of inventory includes goods that are ready to be sold to consumers?
A
Raw materials inventory
B
Work-in-process inventory
C
Finished goods inventory
D
Supplies inventory
Verified step by step guidance1
Understand the concept of inventory stages: Inventory is categorized into different stages based on its position in the production process. These stages include raw materials, work-in-process, finished goods, and supplies inventory.
Define raw materials inventory: This includes the basic materials that are yet to be processed or used in production. These are not ready for sale to consumers.
Define work-in-process inventory: This includes goods that are partially completed and still undergoing production. These are also not ready for sale to consumers.
Define finished goods inventory: This includes goods that have completed the production process and are ready to be sold to consumers. This is the stage of inventory that matches the description in the question.
Define supplies inventory: This includes items used in the production process but not part of the final product, such as maintenance supplies or office supplies. These are not sold to consumers.
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