The combined production costs from all departments for completed products are transferred to the Cost of Goods Sold account immediately after the completion of all production processes.The perpetual inventory system is used.

Question

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In a perpetual inventory system, the combined production costs of completed products are transferred to the Finished Goods Inventory account first, not directly to the Cost of Goods Sold. Costs are moved to Cost of Goods Sold only when the goods are actually sold.

The Combined Production Costs from All Departments for Completed Products