Select the true statement regarding process costing.
A) The degree of completion for conversion costs in ending work-in-process depends on the amount of direct materials used during the period.
B) Because it tracks beginning inventory's actual costs of completion, the weighted-average method is the most accurate process costing system.
C) Estimating the degree of completion is usually easier for conversion costs than for transferred-in costs.
D) Estimating the degree of completion is usually easier for direct materials than for conversion costs.
E) The accuracy of the completion percentages depends on the accounting system used.

Question

Quizplus · Accepted Answer

Estimating the degree of completion is usually easier for direct materials than for conversion costs in process costing. This is because direct materials are physically traceable in the production process, while the conversion costs (such as direct labor and manufacturing overhead) are spread out over the entire production process and are not easily identifiable with specific units of output.

Select the True Statement Regarding Process Costing