Which of the following represents the sequential series of inventory accounts that product costs pass through for a manufacturer?

A. Direct Material Inventory, Direct Labor Inventory, Manufacturing Overhead Inventory

B. Research and Development, Design, Production, Marketing, Distribution, Customer Service

C. Sales Revenue, Cost of Good Sold, SG&A

D. Raw Material Inventory, Work in Process Inventory, Finished Goods Inventory

Question

Business

Silky

11 December, 22:24

Which of the following represents the sequential series of inventory accounts that product costs pass through for a manufacturer?

A. Direct Material Inventory, Direct Labor Inventory, Manufacturing Overhead Inventory

B. Research and Development, Design, Production, Marketing, Distribution, Customer Service

C. Sales Revenue, Cost of Good Sold, SG&A

D. Raw Material Inventory, Work in Process Inventory, Finished Goods Inventory

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Answers (1)

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Coach · Answer 1

D. Raw Material Inventory, Work in Process Inventory, Finished Goods Inventory

Explanation:

This sequence represents the different stages that the finished goods pass throw. While raw materials inventory is the total cost of all component parts currently in stock that have not yet been used, when the process begins direct labor and manufacturing processes are added in order to transform those materials. Then we talk of work in process, and to be a finished good is necessary sometimes more supplies and/or labor and manufacturing processes.