The cost of units transferred from Work in Process Inventory to Finished Goods Inventory is called the cost of goods manufactured. 1. True
2. False

1. True

Explanation:

Work in process inventory is inventory that is still undergoing processing.  When the processing is completed, the goods (inventory) become finished goods.  And they are transferred to Finished Goods Inventory as cost of goods manufactured.  Finished Goods Inventory represents goods that are available for sale.  The cost of finished goods inventory also forms part of the cost of goods sold, which is used in determining the gross profit.  Accounting for work in process inventory is part of the multi-step system of accumulating and allocating cost of production to finished goods.