Department B is the second department in a series of production processes.Department B receives units from Department A.Department B adds materials,labor and overhead to the units received.The company uses process costing.What costs are assigned to each completed unit in Department B?
A) material cost per equivalent unit, conversion cost per equivalent unit
B) transferred-in cost per equivalent unit, conversion cost per equivalent unit
C) transferred-in cost per equivalent unit, material cost per equivalent unit
D) transferred-in cost per equivalent unit, material cost per equivalent unit, conversion cost per equivalent unit

Question

Quizplus · Accepted Answer

In process costing, costs are assigned to each completed unit based on the total cost incurred in the department. Department B receives units from Department A, which means that some costs have already been incurred in the production of these units. Therefore, transferred-in costs per equivalent unit are added to the material and conversion costs incurred by Department B. Hence, the costs that are assigned to each unit in Department B are transferred-in cost per equivalent unit, material cost per equivalent unit, and conversion cost per equivalent unit. Option D is the only choice that includes all three costs.

Department B Is the Second Department in a Series of Production