Question

. On the income statement of a manufacturing company, which of the following replaces purchases in the "Cost of goods sold" section of a retail company? a. finished goods b. cost of merchandise available c. cost of goods manufactured d. work in process

Answer 1

Answer:

C. Cost of goods manufactured

Explanation:

Cost of goods sold refers to all the direct costs associated with the production of goods such as purchases and direct expenses such as freight inwards.

For a manufacturing concern, cost of goods sold represents cost of goods manufactured. Usually cost of goods manufactured includes, cost of material purchased, factory overhead costs incurred and labor wages paid related to the manufacture of a product.