Multiple Choice
Which of the following items is NOT included in the calculation of Cost of Goods Manufactured under both the perpetual and periodic inventory systems?
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4. Merchandising Operations
Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory
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Which of the following are main sections typically found in a schedule of cost of goods manufactured?
A
Accounts receivable, accounts payable, and cash flows
B
Sales revenue, cost of goods sold, and gross profit
C
Direct materials, direct labor, manufacturing overhead, and cost of goods manufactured
D
Operating expenses, net income, and retained earnings
Verified step by step guidance1
Understand the purpose of a schedule of cost of goods manufactured: It is a financial statement that provides detailed information about the production costs incurred during a specific period.
Identify the main components typically included in the schedule: These are direct materials, direct labor, manufacturing overhead, and the total cost of goods manufactured.
Direct materials: This section includes the raw materials used in production, adjusted for beginning and ending inventory of materials.
Direct labor: This section accounts for the wages and salaries paid to workers directly involved in the production process.
Manufacturing overhead: This section includes indirect costs such as factory utilities, depreciation on manufacturing equipment, and other overhead expenses incurred during production.
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