Question

Manufacturing Account is prepared to find out

• A. Cost of goods sold
• B. Cost of goods purchased
• C. Net profit
• D. Work in progress

Answer 1

Answer:

B. Cost of goods purchased

• Manufacturing account is prepared to find out the cost of production.
• It shows the cost of running and maintaining the factory.
• It is prepared to calculate the cost of goods produced during the year and it is also known as the production account.
• It deals with raw materials and work in progress and not the finished goods.
• All the production expenses like depreciation on plant and machinery, salary to the factory manager, wages, etc are debited.