A Product Requires Processing in Two Departments the Baking Department

question 137

Multiple Choice

A product requires processing in two departments the Baking Department and then the Packaging Department before it is completed. Costs transferred out of the Baking Department will be transferred to:

• A) Finished Goods Inventory.
• B) Cost of Goods Sold.
• C) Work in Process-Packaging Department.
• D) Manufacturing Overhead.

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Definitions:

Standard Costs

Predetermined costs to manufacture a single unit of product, serving as a benchmark for measuring performance.

IMA

Stands for the Institute of Management Accountants, a professional organization that promotes the practice of management accounting and financial management.

Price Variances

The difference between the actual cost and the standard cost of goods or services.

Direct Labor Cost Variance

The difference between the budgeted or expected cost of direct labor and the actual cost incurred.