The Packing Department receives goods produced in previous departments. The costs transferred into the Packing Department are treated as
A)conversion cost incurred uniformly throughout the process.
B)materials cost added at the end of the process.
C)materials cost added at the beginning of the process.
D)either materials cost or conversion cost, depending on whether the firm uses FIFO or weighted average.

Question

Quizplus · Accepted Answer

The costs transferred into the Packing Department are treated as materials cost added at the beginning of the process because they represent the costs of goods completed in previous departments and are considered as input materials for the Packing Department.

The Packing Department Receives Goods Produced in Previous Departments