Which of the following lists presents the accounts in the order in which product costs flow?

Question

Quizplus · Accepted Answer

Raw Materials Inventory represents the initial cost of materials used in the production process, followed by Work in Process Inventory, which represents the cost of labor and overhead added to the product as it moves through the production process. Next, the product is moved to Finished Goods Inventory, where it waits to be sold. Finally, when the product is sold, its cost is transferred to Cost of Goods Sold. This is the order in which product costs flow. Therefore, the correct order is Raw Materials Inventory, Work in Process Inventory, Finished Goods Inventory, Cost of Goods Sold, which is presented in choice D.

Which of the Following Lists Presents the Accounts in the Order