Question

A cost received by a subsequent process from a prior process is referred to as a: Select one:

a. cost of goods transferred out.

b. cost of beginning work-in-process.

c. cost of ending work-in-process.

d. transferred-in cost

Answer 1

Answer: Option A

Explanation: Cost of goods transferred out or process costing is an business approach that monitors and builds up direct expenses and assigns indirect expenses to a production process. Consumer costs are delegated, usually in a big batch, which could include the output of a whole month.

It is a form of operational costing used to assess a product's cost at each manufacturing process or point. CIMA describes phase costing as "the relevant costing method where products or services benefit from a constant or repeated series of activities or procedures.