Final answer:
Transferred-in costs should be recorded by debiting the Work in Process account. This reflects the costs that are being accumulated as a product moves through production stages. It is part of tracking the variable costs associated with inputs used in manufacturing. The correct option is D.
Step-by-step explanation:
The student is asking about how to record transferred-in costs in accounting. The proper journal entry to record transferred-in costs within a manufacturing environment is to debit the Work in Process (WIP) account and to credit the respective account from where the costs are transferred.
Among the given options, the correct option is (d) Work in Process because this is the account that reflects the ongoing costs for products that have not yet been completed. This reflects the accumulation of labor, materials, and overhead costs that are added to the product as it moves through the production process.
Costs are typically categorized as either fixed or variable. Fixed costs, such as rent, do not vary with the level of production, while variable costs do. The inputs, or resources used in production, such as labor, materials, and machinery, are essential in generating goods and services. They often make up the variable costs that go into the Work in Process and eventually into the cost of goods sold.