The cost of the items completed and transferred out of a department is the total cost per equivalent unit times the number of units completed.

Question

Quizplus · Accepted Answer

This statement is true according to the weighted-average method of process costing. The total cost per equivalent unit includes both the cost of direct materials and the cost of conversion (direct labor and manufacturing overhead) and is used to calculate the total cost of the units completed and transferred out of the department.

The Cost of the Items Completed and Transferred Out of a Department