Holliday Company's inventory records show the following data: Units Unit Cost Inventory, January...

Question:

Cost of Goods Sold:

Cost of goods sold (COGS) is cost incurred for the manufacture of the products that the company sold during a given period of time. Thus only those costs which are incurred directly in relation to the manufacture or acquisition of products which the company sold during the given period of time alone are considered. Instances of costs incurred include direct material, direct labour, direct expenses, factory overheads, etc., It is computed as Opening Inventory + Purchases / Production made during the year - Closing Inventory. Cost of goods sold is reduced from sales income to get gross profit and hence is an important metric. The cost of goods sold does not include indirect expenses such as administrative expenses, sales and distribution expenses, etc.,

Answer and Explanation: 1