If finished goods inventory increases between the beginning and the end of the year, then the...

If finished goods inventory increases between the beginning and the end of the year, then the cost of goods sold is smaller than the cost of goods manufactured. true or false

Expert Solution

Answer :True

Cost of Goods Sold is Smaller than the Cost of Goods Manufactured.

Since the Finished Goods Increased During the year, All the goods Manufacturing are not sold. Cost of Goods Sold is the cost for all the goods Whereas the Cost of Goods Sold is the cost incurred to Manufacture the goods sold and to find cost of goods sold we just add beginning finished goods inventory and deduct ending finished goods inventory in cost of goods manufactured for the year.

Suppose cost of goods manufacture $100,000 beginning finished goods inventory $5,000 and ending finished goods inventory $10,000

Cost of goods sold:-

Cost of goods manufactured	$100,000
Add: beginning finished goods inventory	$5,000
Less: ending finished goods inventory	$10,000
Cost of goods sold	$95,000

In this way we can say that cost of goods sold is smaller than the cost of goods manufactured if finished goods inventory increases between the beginning and the end of the year.

Kindly give me thumbs up if u like my answer...Thanks!!!

ekkarill92 answered 2 years ago

1.The finished goods beginning inventory = $100,000; The finished goods ending inventory = $50,000; The work...

1.The finished goods beginning inventory = $100,000; The finished goods ending inventory = $50,000; The work in process inventory at the beginning of the year was $150,000 and at the end of the year $50,000; The raw materials inventory at the beginning of the year $80,000 and at the end of the year was $40,000. Manufacturing costs and selling and administrative expenses were as follows: indirect materials = $10,000; factory utilities = $20,000; raw material purchases = $30,000 in June...

Beginning finished goods inventory $ 14,500 $ 16,300 Beginning work in process inventory 15,900 19,650 Beginning...

Beginning finished goods inventory $ 14,500 $ 16,300 Beginning work in process inventory 15,900 19,650 Beginning raw materials inventory 10,500 14,400 Rental cost on factory equipment 28,750 26,500 Direct labor 25,000 42,600 Ending finished goods inventory 20,000 13,000 Ending work in process inventory 23,500 19,600 Ending raw materials inventory 7,200 8,800 Factory utilities 9,150 12,250 Factory supplies used 11,500 5,400 General and administrative expenses 32,500 44,500 Indirect labor 2,350 7,960 Repairs—Factory equipment 6,140 2,600 Raw materials purchases 37,000 59,000 Selling...

Under applied over head 14,000 Finished goods inventory, beginning 310,000 Finished goods inventory, ending 380,000 Raw...

Under applied over head 14,000 Finished goods inventory, beginning 310,000 Finished goods inventory, ending 380,000 Raw materials inventory, beginning 110,000 Raw materials inventory, ending 95,000 Work in process inventory, beginning 105,000 Work in process inventory, ending 85,000 Selling expenses 180,000 Manufacturing overhead Applied 490,000 Direct labor 390,000 Administrative expenses 385,000 Purchases of raw materials 295,000 Sales 2,885,000 Required: 1) Prepare a schedule of Cost of Goods Sold for the year in good form? (Use the table given in the answer...

When there are no units in the beginning Finished Goods Inventory and the units produced are...

When there are no units in the beginning Finished Goods Inventory and the units produced are more than the units sold, the operating income will be higher under variable costing than absorption costing.

In a production budget, if the number of units in finished goods inventory at the end...

In a production budget, if the number of units in finished goods inventory at the end of the period is less than the number of units in finished goods inventory at the beginning of the period, then the expected number of units sold is less than the number of units to be produced during the period.

Garcon Pepper Beginning finished goods inventory 14,800 19,750 Beginning work in process inventory 15,600 19,650 Beginning...

Garcon Pepper Beginning finished goods inventory 14,800 19,750 Beginning work in process inventory 15,600 19,650 Beginning raw materials inventory 7,800 14,400 Rental cost on factory equipment 31,000 24,100 Direct labor 23,800 44,600 Ending finished goods inventory 18,500 16,500 Ending work in process inventory 26,500 17,800 Ending raw materials inventory 6,800 9,800 Factory utilities 13,500 12,250 Factory supplies used 12,400 4,900 General and administrative expenses 33,000 45,000 Indirect labor 2,150 7,660 Repairs—Factory equipment 6,260 2,450 Raw materials purchases 41,000 57,500 Selling...

Dido Co.’s finished goods inventory policy is to hold enough inventory at the end of the...

Dido Co.’s finished goods inventory policy is to hold enough inventory at the end of the month to meet 22% of next month’s sales requirements. The cost and selling price of each unit of inventory is $19 and $29, respectively. Dido’s budgeted sales (in units) for the months June through September 20x1 is as follows: June 7510 July 5064 August 9826 September 2192 What is Dido’s budgeted production (in dollars) for the month of August 20x1? Select one: a. $8147...

During FY 2018, Towson Manufacturing had a beginning finished goods inventory of $18,000 & ending finished...

During FY 2018, Towson Manufacturing had a beginning finished goods inventory of $18,000 & ending finished goods inventory of $17,500. Beginning work-in-process was $14,000 and ending work-in-process was 10,500. Factory overhead was $22,500. The total manufacturing costs amounted to $270,000. Use this information to determine the FY 2018 Cost of Goods Sold. (Round enter as whole dollars only.)

1. Use the following data to determine the cost of goods manufactured: Beginning finished goods inventory...

1. Use the following data to determine the cost of goods manufactured: Beginning finished goods inventory $ 12,600 Direct labor used 32,400 Beginning work in process inventory 9,000 General and administrative expenses 15,300 Direct materials used 42,300 Ending work in process inventory 10,800 Indirect labor 8,100 Ending finished goods inventory 11,300 Indirect materials 15,300 Depreciation—factory equipment 9,300 2. Current information for the Healey Company follows: Beginning raw materials inventory $ 31,200 Raw material purchases 76,000 Ending raw materials inventory 32,600...

Wiley’s electronics has a policy of maintaining a finished goods inventory balance at the end of...

Wiley’s electronics has a policy of maintaining a finished goods inventory balance at the end of a month equal to 30% of the budgeted sales requirements of the following month. The ending inventory balance on 30 January was 840 units, and the projected unit sales for February, March, and April were 4,800, 5,200, and 5,400 units respectively. The labor requirements per unit produced are as follows: Particulars Time required (hours) Rate per hour Machining 1.8 $23 Sorting 0.9 $18 Assembly...

Question