Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 17 - Process Costing - Assignment Material - Questions - Page 696: 17-14

Answer

I disagree. Transferred-in costs are incurred in the same accounting period within different departments, not in the preceding period.

Work Step by Step

I disagree with the statement that transferred-in costs are those costs incurred in the preceding accounting period. Transferred-in costs are costs incurred in a previous department within the same accounting period. In a process-costing system, they represent the costs transferred from one department to another within the current accounting period as work-in-process units move through various stages of production. These costs are not necessarily tied to the preceding accounting period but are part of the ongoing production cycle. Therefore, they should be recognized as costs incurred within the same accounting period as they move between departments.
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