In a Process Costing System, Some of the Increases to Department

question 114

Multiple Choice

In a process costing system, some of the increases to Department B's Work in Process Inventory account would come from Department A's

• A) Finished Goods Inventory account.
• B) Materials Inventory account.
• C) Cost of Goods Sold account.
• D) Work in Process Inventory account.

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Definitions:

Labor Efficiency Variance

The difference between the actual hours taken to complete a task and the standard hours allowed for the actual output, multiplied by the standard hourly labor rate.

Labor Time

The duration of time workers spend in the process of producing goods or providing services.

Standard Quantity

The expected quantity of materials or labor hours needed to produce a unit of product, set during the budgeting or planning process.

Standard Hours Allowed

The amount of time that should have been taken to complete a task or produce a certain quantity of goods, based on predetermined standards.