PRC-1 · Chapter 7 · Question 66 of 100
Which of the following equations correctly calculates the Cost of Goods Manufactured?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Prime Cost + Factory Overheads + Opening inventory (WIP) - Closing inventory (WIP)
Explanation
Cost of goods manufactured equals Prime Cost plus Factory Overheads (yielding total factory cost), adjusted by adding opening Work in Progress and deducting closing Work in Progress.
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