Which of the following statements regarding transferred-in costs is true?
A)The number of equivalent units for transferred-in costs in ending Work in Process inventory is the same as the number of physical units transferred-in present in the ending Work in Process inventory.
B)When considering only transferred-in costs, the cost of beginning inventory must equal the cost of the ending inventory.
C)Transferred-in units are assumed to be 0 percent complete when the cost per equivalent unit calculation is performed.
D)All of these answer choices are correct.

Question

Quizplus · Accepted Answer

Transferred-in costs are costs incurred in a previous department that are transferred to the next department in the production process. The number of equivalent units for transferred-in costs in ending Work in Process inventory is the same as the number of physical units transferred-in present in the ending Work in Process inventory. This is because the transferred-in costs are assumed to be complete at the time of transfer and do not require any additional work in the current department. Choices B and C are incorrect because they do not accurately represent the treatment of transferred-in costs in the cost accounting calculations.

Which of the Following Statements Regarding Transferred-In Costs Is True