ECONOMICS

Detailed explanation-1: -Question: When goods are sold, their costs are transferred to the finished goods inventory. (b) False.

Detailed explanation-2: -WIP refers to the raw materials, labor, and overhead costs incurred for products that are at various stages of the production process. WIP is a component of the inventory asset account on the balance sheet. These costs are subsequently transferred to the finished goods account and eventually to the cost of sales.

Detailed explanation-3: -What are the transfers from the Finished Goods Inventory called? Cost of Goods Sold.

Detailed explanation-4: -The cost of goods sold (COGS) is the total cost of inventory that has been sold by a company. This figure is calculated by adding together the variable cost of materials, labor, and overhead associated with each unit of inventory sold.

Detailed explanation-5: -The Difference Between Inventory and Cost of Goods Sold Inventory includes all of the raw materials, work-in-progress, and finished goods that a company has on hand. COGS only includes the direct costs associated with the production of the goods that were sold.