ECONOMICS

Detailed explanation-1: -The journal entry for cost of goods manufactured includes the costs of units that are partially completed.

Detailed explanation-2: -The cost of goods manufactured is recorded with a debit to the Finished Goods Inventory account and a credit to the Work-in-Process Inventory account. A process costing system is used when a company produces identical units through a series of production steps.

Detailed explanation-3: -You may be wondering, Is cost of goods sold a debit or credit? When adding a COGS journal entry, debit your COGS Expense account and credit your Purchases and Inventory accounts. Inventory is the difference between your COGS Expense and Purchases accounts.

Detailed explanation-4: -Definition of Cost of Goods Manufactured In other words, it includes the costs of direct materials, direct labor, and manufacturing overhead that are included in the products that moved from the manufacturing area to the finished goods inventory during the accounting period.