Use the information below to answer the following question(s).Hollywood North Magic, a cosmetic manufacturer, began operations in January.During the first month of operations, $60,000 was incurred for direct materials and $80,000 was incurred for conversion costs.During January, 30,000 litres of cosmetics were started and 6,000 litres were unfinished at the end of the month.Ending work-in-process was 45% completed.All inputs are added evenly throughout the production process.
-Which of the following items is not a component of "total costs to be accounted for in a given department's operations" when using process costing?
A)direct manufacturing labour used in the given department
B)the cost of materials requisitioned and used by the given department
C)transferred-in costs from the prior processing department
D)transferred-out costs to the next department
E)conversion costs

Question

Quizplus · Accepted Answer

Transferred-out costs to the next department are not a component of "total costs to be accounted for in a given department's operations" because these costs represent the beginning inventory of the next department and are not relevant to the current department's operations. The other options (direct manufacturing labour, materials requisitioned, transferred-in costs, and conversion costs) are all included in the total costs to be accounted for in the current department's operations.

Use the Information Below to Answer the Following Question(s)