is the aggregate amount of cost incurred by a business to produce goods in a reporting period. The term can then be defined in two ways, which are:The entire amount of this cost is charged to expense in the reporting period, which means that total manufacturing cost is the same as the cost of goods sold; or
A portion of this cost is charged to expense in the period, and some of it is allocated to goods produced in the period, but not sold. Thus, a portion of total manufacturing cost may be assigned to the inventory asset, as stated in the balance sheet.