Explain the difference between direct materials inventory, work in process inventory, finished goods inventory, and cost of goods sold.
What will be an ideal response?
Direct materials inventory contains the raw materials (or the costs of the materials) that will be used in production. Work in process contains the products (or the accumulated costs) that have been started into production but are not yet completed. Finished goods contains the completed products (or the cost of it) that are not yet sold. Cost of goods sold contains the costs associated with the products that have been sold.
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