Q17RQ - Horngren'S Financial And Managerial Accounting

Question

What are transferred in costs? When do they occur?

Step-by-Step Solution

Answer

The transferred in cost means the total cost of the product of one department, which is transferred to another department for further processing. It occurs when the manufacturing of a product passes through more than one process. 

Step-by-Step Solution: Step 1: Costing

Costing is a method of assigning the cost of production to individual units of product. It can be done either by the process or the job order costing system.

Step 2: Transferred in cost

Transferred in cost means the cost incurred on manufacturing the product up to the previous process, which is now transferred to the current process. It occurs when the inventory is partially completed and requires further processing in the current process.