A Cost Incurred by the Baking Department That Is Transferred

question 50

Multiple Choice

A cost incurred by the Baking Department that is transferred to the Packaging Department is called a

• A)conversion cost by the Baking Department.
• B)transferred-out cost by the Packaging Department.
• C)equivalent unit cost by the Baking Department.
• D)transferred-in cost by the Packaging Department.

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Definitions:

Fixed Manufacturing Overhead

The portion of total manufacturing overhead costs that do not vary with the level of production or output.

Work in Process

Inventory account containing goods that are in the manufacturing process but are not yet complete.

Standard Costs

Predetermined or budgeted costs used for cost control and decision-making, serving as a benchmark for measuring performance.

Materials Price Variance

The difference between the actual cost of materials used in production and the expected (or standard) cost, reflecting changes in material prices.