A Product Requires Processing in Two Departments, Department 22 and Then

question 68

Multiple Choice

A product requires processing in two departments, Department 22 and then Department 23, before it is completed.What happens to costs transferred out of Department 22?

• A)They are debited to Finished Goods Inventory.
• B)They are transferred to Cost of Goods Sold.
• C)They are debited to Work in Process-Department 23.
• D)They are credited to Manufacturing Overhead.

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Definitions:

Just-in-Time

A production strategy that strives to improve a business's return on investment by reducing in-process inventory and associated carrying costs.

Service Sector

The segment of the economy that produces intangible goods, such as services rather than physical products, including industries like healthcare, education, and finance.

Labour-intensive

Describing industries or processes that require a large amount of manual labor input compared to capital investment.

Automate

The use of technology to perform tasks with minimal human intervention, often to increase efficiency and reliability.