Cost of goods available for sale is:
a) beginning inventory + cost of goods sold.
b) cost of goods sold + purchases.
c) ending inventory + cost of goods sold.
d) purchases + ending inventory.
The Cost of goods available for sale is the price (at cost) of the goods which is available for sale to the customers. There are two ways to calculate the cost of goods available for sale:-
- Beginning Inventory + Purchases
- Ending Inventory + Cost of Goods sold
Both the methods will derive to the cost of goods available for sale.
Ending Inventory is the cost of the finished goods available in the stock at the end of the period.
Cost of Goods sold
Cost of goods sold is the cost of the goods which have been already sold out to the customers.
The correct answer is
C) Ending Inventory + Cost of goods sold
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