Question

When there are no work in process inventories:

1 total manufacturing costs incurred equals cost of goods manufactured

2 total manufacturing costs incurred equals cost of goods sold

3 cost of goods manufactured equals cost of goods sold

4 none of above

Please Explain

Answer 1

When there are no work in process inventories total manufacturing costs incurred equals cost of goods manufactured

When there are no work in process inventories, it means all manufacturing costs incurred during the period have been completed during the period.

Cost of goods manufactured by formula equals, Beginning Work in process + Total manufacturing costs incurred - Ending work in Process = Cost of goods manufactured

When there are no work in process inventories, Beginning Work in process and Ending work in Process will be zero and Total manufacturing costs incurred = Cost of goods manufactured

Option 1 is correct