In a Process Costing System with Three Departments, When Items

question 81

Multiple Choice

In a process costing system with three departments, when items are sold, the cost of the items is moved from

• A)Work in Process to Finished Goods.
• B)Work in Process to Cost of Goods Sold.
• C)Cost of Goods Sold to Finished Goods.
• D)Finished Goods to Cost of Goods Sold.

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Definitions:

Economic Profits

Economic profits refer to the excess returns a firm makes above its opportunity costs, factoring in both explicit and implicit costs.

Profit-Maximizing

The process of finding the level of output at which a firm makes the highest profit.

Short Run

A period in which at least one factor of production is fixed and cannot be varied by the firm.

Long Run

A period sufficient for all inputs in production to be adjusted, including physical capital and labor.