Answer:

Identify correct option among the five:

Correct option is (c)

The costs transferred from a prior process to a subsequent process are referred to as the cost of goods transferred in (for the transferring department).

Explanation:

The cost transferred from prior process to subsequent process are referred to as the cost of goods transferred in for receiving process or transferring department and cost of goods transferred out for prior process or transferor department.

Answer:

Identify correct option among the five:

Correct option is (d)

To record the transfer of cost from a prior process to a subsequent process, the following entry would be made debit Work in Process (subsequent department) and credit Work in Process (prior department).

Explanation:

Journal entry of transferring from prior process to subsequent process is follows:

Receiving process Debit

Giving process Credit

Answer is reflected only in option (d)

Answer:

Treatment of prior period cost and prior period output:

Treatment of prior period cost and prior period output under weighted average method and FIFO method are mentioned as follows:

Under weighted average method:

Under weighted average method, prior period cost and cost related to current period are combined. It is assumed that cost as well as output that are carried from the prior period is treated as they are related to the current period. Therefore, the inventory level at the beginning and the costs are combined with the work as well as costs related to current period. After including the prior period cost, the total cost is taken as if it is current periods manufacturing cost. Finally, per unit of an average cost is calculated and apportioned to both units that are transferred as well as the units that lie as the ending inventory.

Under First-in-First Out (FIFO) method:

Under First-in-First Out (FIFO) method, work as well as cost of prior period are kept separate from the work and cost related to the current period. Therefore to calculate the unit cost of the current period, the work as well as cost related to current period only is considered. The assumption is that units related to beginning period are finished first and then transferred. Units that are started in the current period are classified into two different categories that are units started and finished and units started and not finished. Units related to both of the categories are then valued as per the cost per equivalent unit of current period.