A product requires processing in two departments the Baking Department and then the Packaging Department before it is completed. Costs transferred out of the Baking Department will be transferred to:
A) Finished Goods Inventory.
B) Cost of Goods Sold.
C) Work in Process-Packaging Department.
D) Manufacturing Overhead.

Question

Quizplus · Accepted Answer

The costs transferred out of the Baking Department are not yet completed products, but rather partially completed products that are waiting to be further processed in the Packaging Department. Therefore, the costs associated with these products should be transferred to the Work in Process account of the Packaging Department, indicating that these are partially completed products in need of further processing.

A Product Requires Processing in Two Departments the Baking Department