CAF-5 · Chapter 7 · Question 10 of 10
How is the cost of finished goods calculated to be transferred out of a process account?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Total equivalent units transferred out multiplied by the total cost per equivalent unit.
Explanation
The cost assigned to units transferred to finished goods (or the next process) is calculated by taking the number of fully completed units transferred out and multiplying them by the total cost per equivalent unit (material + conversion).
More Process Costing MCQs
- Q2How is the scrap value of a "Normal Loss" treated when calculating the cost per equivalent unit of good output?
- Q3Which of the following is the correct formula for calculating the per unit cost of good output in a process with normal loss and scrap…
- Q4A production process has an input of 2,000 litres. The normal loss is estimated at 10% of the input. If the actual good output is 1,700…
- Q5At what value is an "Abnormal Loss" or "Abnormal Gain" recorded in the main process account?
- Q6If the actual loss in a manufacturing process is less than the expected normal loss, the resulting difference is known as: