COST ACCOUNTING
PROCESS COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Finished Goods Inventory.
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Cost of Goods Sold.
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Work in Process Inventory-Packaging Department.
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Manufacturing Overhead.
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Detailed explanation-1: -A product requires processing in two departments, the Baking Department and then the Packaging Department, before it is completed. Costs transferred out of the Baking Department will be transferred to: a) Finished Goods Inventory.
Detailed explanation-2: -The manufacturing cost that is transferred from one production process to another (for example, from production to packaging) is called the: transferred-in cost.
Detailed explanation-3: -The equivalent units of production is the sum of units completed and transferred out and the equivalent units of ending work in process inventory (5, 000 units X 60%) or 20, 000 + 3, 000 = 23, 000 units. Equivalent units of production measure the amount of work that should be completed during a period.