Which of the following is correct concerning information on the production cost report?
A)The total equivalent units accounted for equals the costs accounted for.
B)Physical units accounted for equals the units transferred out.
C)Total costs charged equals the units completed times the cost per unit.
D)Costs accounted for equals the costs of the units transferred out plus the cost of units in ending inventory.

Question

Quizplus · Accepted Answer

This is known as the cost reconciliation, which states that the total costs accounted for must equal the cost of units transferred out plus the cost of units in ending inventory. A is incorrect because equivalent units accounted for include both completed units and units in ending inventory, which may not necessarily equal the costs accounted for. B is incorrect because physical units accounted for may include units in beginning inventory and those in ending inventory, whereas units transferred out only refers to those completed during the period. C is incorrect because total costs charged may include costs from beginning inventory, whereas the cost per unit is only for current period costs.

Which of the Following Is Correct Concerning Information on the Production