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Problem 1: Which of the following is true regarding flow of costs for a manufacturer?
Option 1: Inventory flow is Raw Materials to Work In Process to Finished Goods, then is considered Cost of Goods Sold when the sale of the inventory is made.
Option 2: Inventory flow is Raw Materials to Finished Goods to Work in Process, then is considered Cost of Goods Sold when the sale of the inventory is made.
Option 3: Inventory flow is Finished Goods to Work In Process to Raw Materials, then is considered Cost of Goods Sold when the sale of the inventory is made.Option 4: Inventory purchased no matter what state it is in is placed in the Inventory asset account until it is sold, when it becomes Inventory Sold on the balance sheet.
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