Question

If a company purchases plastic that they will melt and form into milk jugs that they will then sell to milk plants, the cost of the plastic will be categorized as what type of expense? A : selling expense B : administrative expense C : marketing expense D : cost of goods sold

Answer 1

D : cost of goods sold

Step-by-step explanation:

The plastic are used to build the milk jugs that are used to sell milk . So the cost of them is part of the goods sold since withouth the sell of the milk , the jugs won't exist