Which of the following statements about process costing is true?
A)Total transferred-in cost is equal to the total transferred-out cost during a period.
B)The costs of inventory completed in its final department in the manufacturing process will be transferred to Finished Goods inventory.
C)If a department has transferred-in costs, it means that the inventory accounts were not closed correctly at the end of the last period.
D)None of the answer choices are correct.

Question

Quizplus · Accepted Answer

In process costing, the costs of inventory completed in its final department in the manufacturing process will be transferred to Finished Goods inventory. This is because the products are now complete and ready to be sold or shipped out. Option A is incorrect because total transferred-in cost is not necessarily equal to total transferred-out cost since some inventory may be carried forward to the next period. Option C is incorrect as transferred-in costs are a normal occurrence in process costing and do not indicate incorrect closing of inventory accounts. Option D is incorrect as there is at least one correct answer choice.

Which of the Following Statements About Process Costing Is True