Question

Which of the following best describes the correct sequence of the flow of costs for a manufacturing firm? Work-in-process, raw materials, finished goods, cost of goods sold. Raw materials, work-in-process, finished goods, cost of goods sold. None of the above. Raw materials, work-in-process, cost of goods sold, finished goods. Raw materials, finished goods, work-in-process, cost of goods sold.

Answer 1

Answer:

The correct answer is letter "B": Raw materials, work-in-process, finished goods, cost of goods sold.

Explanation:

The flow of costs reflects the way or route in which costs travel from a department to others inside a business cycle. This usually applies to manufacture companies where it is needed to appraise the raw materials, work in process, finished goods supply, and cost of goods sold. The flow of costs can be used in other processes where costs are inherently attached like labor.