CERTIFIED MANAGEMENT ACCOUNTANT
EXAM SCRIPT 2026 FULL SOLUTION TEST
BANK
●● Cost of Goods Manufactured. Answer: Beginning work-in-process
inventory $xx
add: total manufacturing costs xx
less: ending work-in-process inventory (xx)
Cost of goods manufactured $xx
●● Cost of Goods Manufactured calculation. Answer: Sales
Less: gross profit
=Cost of goods sold
Add: ending finished goods
=Goods available for sale
Less: beginning finished goods
=Cost of goods manufactured
●● Cost of goods sold calculation (manufacturing). Answer: Cost of
goods manufactured + Beginning finished goods inventory - ending
inventory of finished goods = COGS
, ●● Carrying Costs. Answer: Costs of holding or story inventory. Ex:
capital, insurance, warehousing, breakage, absolescence
●● Process Costing. Answer: Like products that are mass produced
should be accounted for using process costing techniques to assign costs
to products. Costs are accumulated by departments or cost centers rather
than by jobs, work-in-process is stated in terms of equivalent units, and
unit costs are established on a departmental basis. Process costing is an
averaging process that calculates the average cost of all units.
●● Target Costing. Answer: Target costing begins with a target price,
which is the expected market price given the company's knowledge of
its customers and competitors. Subtracting the unit target profit margin
determines the long-term target cost. If this cost is lower than the full
cost, the company may need to adopt comprehensive cost-cutting
measures.
●● Opportunity costs. Answer: Opportunity cost, also called implicit
cost, is the maximum benefit forgone by using a scarce resource for a
given purpose and not for the next-best alternative.
●● Total manufacturing costs. Answer: Beginning direct materials
inventory
Add: purchases
less: purchase returns
add: transportation-in
EXAM SCRIPT 2026 FULL SOLUTION TEST
BANK
●● Cost of Goods Manufactured. Answer: Beginning work-in-process
inventory $xx
add: total manufacturing costs xx
less: ending work-in-process inventory (xx)
Cost of goods manufactured $xx
●● Cost of Goods Manufactured calculation. Answer: Sales
Less: gross profit
=Cost of goods sold
Add: ending finished goods
=Goods available for sale
Less: beginning finished goods
=Cost of goods manufactured
●● Cost of goods sold calculation (manufacturing). Answer: Cost of
goods manufactured + Beginning finished goods inventory - ending
inventory of finished goods = COGS
, ●● Carrying Costs. Answer: Costs of holding or story inventory. Ex:
capital, insurance, warehousing, breakage, absolescence
●● Process Costing. Answer: Like products that are mass produced
should be accounted for using process costing techniques to assign costs
to products. Costs are accumulated by departments or cost centers rather
than by jobs, work-in-process is stated in terms of equivalent units, and
unit costs are established on a departmental basis. Process costing is an
averaging process that calculates the average cost of all units.
●● Target Costing. Answer: Target costing begins with a target price,
which is the expected market price given the company's knowledge of
its customers and competitors. Subtracting the unit target profit margin
determines the long-term target cost. If this cost is lower than the full
cost, the company may need to adopt comprehensive cost-cutting
measures.
●● Opportunity costs. Answer: Opportunity cost, also called implicit
cost, is the maximum benefit forgone by using a scarce resource for a
given purpose and not for the next-best alternative.
●● Total manufacturing costs. Answer: Beginning direct materials
inventory
Add: purchases
less: purchase returns
add: transportation-in
