ECONOMICS

Detailed explanation-1: -Transferred-in costs are costs accumulated during the upstream production processes within a company.

Detailed explanation-2: -Transferred in costs are costs that have been incurred in a prior department on units that have been moved into a subsequent department. They normally include materials, labor and overhead. This normally occurs when a manufacturing company has different processing department in their production.

Detailed explanation-3: -WIP refers to the raw materials, labor, and overhead costs incurred for products that are at various stages of the production process. WIP is a component of the inventory asset account on the balance sheet. These costs are subsequently transferred to the finished goods account and eventually to the cost of sales.

Detailed explanation-4: -Transferred-in goods are treated as if they are a separate material category that is added at the beginning of the process for the equivalent units and unit cost computations. The transferred-in units have 100% of the work and costs of the prior process.