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Cost of Goods: Definition & Calculation

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

What's the best explanation of costs of goods?

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1. Which of the of following costs are NOT usually considered as part of the costs of goods?

2. You are a small retailer who started with $3,000 in inventory this month. You bought another $2,500 worth of inventory during the month and ended up with $1,000 left at the end of the month. You spent an additional $1,200 in overhead expenses. What was the your costs of good sold?

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About This Quiz & Worksheet

The cost of goods is an important calculation in business. This quiz/worksheet will help you assess your understanding of how it is calculated and let you put your skills to the test with practice problems.

Quiz & Worksheet Goals

In these assessments you'll be tested on factors, definitions, and calculations of:

  • Costs of goods
  • Overhead
  • Inventory

Skills Practiced

This quiz and worksheet allows students to test the following skills:

  • Problem solving - use acquired knowledge to solve practice problems involving the cost of goods
  • Making connections - use understanding of the concept of the cost of goods in different situations
  • Distinguishing differences - compare and contrast costs that are and aren't considered part of the cost of goods
  • Defining key concepts - ensure that you can accurately describe the concept of the cost of goods

Additional Learning

To learn more about the cost of goods, review the accompanying lesson Cost of Goods: Definition & Calculation. This lesson covers the following objectives:

  • Define costs of goods
  • Understand what constitutes the cost of goods in manufacturing, retail, and service industries
  • Know the formula for calculating the costs of inventory over a certain period of time
  • Know the formula for calculating the costs of goods when the goods are self-manufactured
  • Know the formula for calculating the costs of service provided
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