When beginning inventory is part of the production report, costs from the prior department are included. They are

Question

Quizplus · Accepted Answer

The beginning inventory amount and the costs transferred in from the prior department are included in the production report. This is because the beginning inventory is the unfinished goods carried forward from the prior department, and the costs transferred in make up the cost of those goods. Therefore, the beginning inventory amount and the costs transferred in must be accounted for when calculating production costs.

When Beginning Inventory Is Part of the Production Report, Costs