What situation is created if there are no units in process at the beginning of the period?
A)The company must be using a job-order cost system.
B)The units to be accounted for will equal the units transferred out plus the units in process at the end of the period.
C)The units started into production will equal the number of units transferred out.
D)Equivalent units of production for materials and conversion costs will be the same.

Question

Quizplus · Accepted Answer

If there are no units in process at the beginning of the period, then the only units to be accounted for are the units started into production during the period. Therefore, the units to be accounted for will equal the units transferred out plus the units in process at the end of the period. Option A is incorrect because the company could be using a process cost system. Option C is not necessarily true in this situation. Option D is also not necessarily true as it depends on the actual production process.

What Situation Is Created If There Are No Units in Process