Question

Which of the following statements is true regarding a production cost​ report?

A. Each process department prepares its own production cost report each month.
B. The transferred−in ​costs, direct materials​ cost, and conversion costs assigned to the units in ending work−in−process inventory become the beginning work−in−process inventory balances on the next​ month's cost report.
C. The production cost report summarizes the 5−step process on one schedule.
D. All of the above are true statements.

Answer 1

The correct answer is B. A production cost report summarizes the costs assigned to each process department and the units in ending work-in-process inventory. Option B is the true statement.

Step-by-step explanation:

A production cost report is a document that summarizes the costs incurred in the production process. It provides information about the costs assigned to each process department and the units in ending work-in-process inventory.

Option A is not true because a single production cost report is prepared for the entire production process, not by each process department separately.

Option B is true. The costs assigned to the units in ending work-in-process inventory become the beginning work-in-process inventory balances on the next month's cost report.

Option C is not true because the production cost report typically includes multiple schedules or sections, not just one.

Therefore, the correct option is Option B.