In a process cost system, the amount of work in process inventory is valued by
A) finding the sum of all open job costs
B) allocating departmental costs between completed and partially completed units
C) multiplying units in ending inventory by the direct materials cost per unit
D) finding the sum of all completed jobs

Question

Quizplus · Accepted Answer

In a process cost system, work in process inventory is valued by allocating departmental costs between completed and partially completed units. This is done by dividing the total departmental costs (direct materials, direct labor, and manufacturing overhead) by the total units produced, giving a cost per unit. This cost per unit is then multiplied by the number of units in ending work in process inventory to determine the value of work in process inventory.

In a Process Cost System, the Amount of Work in Process