The cost of transferred-in units is accounted for by:
A) Ignoring it
B) Adding it to beginning WIP and work performed this period as an additional cost with a separate category
C) Adding it to direct materials and allocating it with the direct materials
D) Adding it to conversion costs and allocating it with conversion costs

Question

Quizplus · Accepted Answer

The cost of transferred-in units is accounted for by adding it to the beginning work in process (WIP) and the work performed during the current period as an additional cost with a separate category. This approach ensures that the costs associated with the transferred-in units are accurately reflected in the product's total cost.

The Cost of Transferred-In Units Is Accounted for By