Final answer:
The statement is false. Units that are partially complete are accounted for within the work-in-process inventory, not finished goods inventory. The valuation of these units includes allocating fixed and variable costs based on their completion stage.
Step-by-step explanation:
Process Costing and Partially Completed Units
The statement that in process costing, units that are partially completed are accounted for the same as units in finished goods inventory is False. In process costing, units that are partially complete are accounted for within the work-in-process (WIP) inventory, not the finished goods inventory. Finished goods are products that have completed the production process and are ready to be sold, while WIP refers to the inventory of items still being processed.
Understanding how to properly track and value WIP is essential for accurate financial reporting. The costs of WIP include direct materials, direct labor, and a portion of manufacturing overhead based on the percentage of completion. Conversely, finished goods consist of full absorption of all production costs. Accounting for partially completed units involves allocating fixed and variable costs based on their stage of completion, which differs from how finished goods are valued.
Regarding the note on the marginal cost of the first unit of output being the same as total cost, this pertains to the understanding of how costs behave in relation to production outputs. Fixed costs do not change with the level of production, while variable costs vary directly with the volume of production. Thus, the marginal cost, which is the cost of producing one additional unit, includes both fixed and variable components and is relevant for decision-making in process costing.