Adjusted Cost of Goods Sold
Cost of Goods Sold before Adjustments is called normal or usual or unadjusted Cost of Goods Sold or Cost of Sales while adjusted cost of goods sold is created after making adjustments to this normal cost of goods sold because of variances occurred during the production process or inventory adjustment that affected the value of Cost of Goods Sold during the accounting cycle. These variances occurred in the form of changes in production and variable costs that ultimately cause changes in total actual overhead costs or manufactured costs. If the actual manufactured cost is more than allocated manufactured cost than the variance is added to unadjusted cost of goods sold and if it is less than allocated manufactured cost, then it is deducted from normal cost of goods sold as we added more allocated cost to the normal cost of goods sold than the actual one. Adjusted Cost of Goods Sold Formula Following Formula is used to calculate Adjusted Cost of Goods...