Asked by Claudio Hernandez on Jun 03, 2024
Verified
When products are completed, their product costs are transferred from work in process inventory to the:
A) manufacturing overhead accounts.
B) finished goods account.
C) cost of goods sold account.
D) indirect labour account.
Product Costs
The direct and indirect costs incurred to produce a product, including materials, labor, and overhead.
Work in Process Inventory
Goods partially completed but not yet ready for sale, representing a stage between raw materials and finished goods in the manufacturing process.
Finished Goods Account
An account used to track the value of inventory that has been completed and is ready for sale.
- Comprehend the progression of costs in manufacturing from work in process to finished goods, and its consequences for financial reporting.
Verified Answer
DM
Daniel MoloisaneJun 08, 2024
Final Answer :
B
Explanation :
When products are completed, their cost is transferred to the finished goods account until they are sold. Once sold, their cost is then transferred to the cost of goods sold account.
Learning Objectives
- Comprehend the progression of costs in manufacturing from work in process to finished goods, and its consequences for financial reporting.