Asked by RMerline Benjamin on Jul 13, 2024
Verified
Which of the following costs will not affect cost of goods sold?
A) Inventory inspection costs.
B) Inventory preparation costs.
C) Inventory-related selling costs.
D) Freight charges incurred to bring inventory to the warehouse.
Cost of Goods Sold
Expenses directly related to the production of a company's sold merchandise.
Inventory-related Selling Costs
These are expenses directly tied to the selling of inventory items, such as shipping and handling fees.
Inventory Inspection Costs
Expenses associated with verifying the quantity and quality of inventory on hand.
- Acquire knowledge on the classification of costs associated with inventory and their repercussions on financial accounts.
Verified Answer
DN
Darren NocettiJul 16, 2024
Final Answer :
C
Explanation :
Inventory-related selling costs do not affect the cost of goods sold (COGS) because COGS includes the direct costs attributable to the production of the goods sold by a company. Selling costs are considered operating expenses, not part of the cost of inventory.
Learning Objectives
- Acquire knowledge on the classification of costs associated with inventory and their repercussions on financial accounts.
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