COST ACCOUNTING
PROCESS COSTING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
beginning work in process-units transferred out.
|
|
|
beginning work in process + ending work in process.
|
|
|
ending work in process + units transferred out.
|
|
|
ending work in process-units started into production
|
Detailed explanation-1: -To calculate the goods transferred out, simply take the units transferred out times the sum of the two equivalent unit costs (materials and conversion) because all items transferred to the next department are complete with respect to materials and conversion, so each unit brings all its costs.
Detailed explanation-2: -The total cost assigned to units transferred out equals the cost per equivalent unit times the number of equivalent units.
Detailed explanation-3: -Cost of Units Transferred Out is the cost of the units that are finished by the department during the period and transferred out to other departments or to finished goods inventory. The cost includes materials and conversion costs.
Detailed explanation-4: -Equivalent units are notional whole units that are equivalent to the number of incomplete units adjusted for their stage of completion. For example, if there are 200 incomplete units in a process at the end of a period and they are 75% complete then this is equivalent to 150 (200 × 0.75) whole (complete) units.