What are transferred-in costs?
A) costs that can be ignored in calculating the cost of ending Work-in-Process Inventory
B) costs that can be ignored in calculating the cost of beginning Work-in-Process Inventory
C) costs that can be ignored in calculating the cost of units transferred to the next department
D) costs incurred in a previous department for units that have been received by a subsequent department

Question

Quizplus · Accepted Answer

Transferred-in costs are costs incurred in a previous department for units that have been received by a subsequent department. These costs are added to the direct materials, direct labor, and manufacturing overhead costs incurred in the current department to determine the total cost of the units transferred out. Options A, B, and C suggest that transferred-in costs can be ignored, which is not true.

What Are Transferred-In Costs