Question

The existence of ending Work In Process Inventory necessitates the use of the 5minusstep process costing procedure. true or false

Answer 1

The statement is: True.

Step-by-step explanation:

The Work In Progress (WIP) Inventory represents the sources needed during the production of a good. While calculating costs for those sources it is necessary to follow the 5-steps of process costing which are the following:

1) Determine the flow of units generated.

2) Adjust the inventory to calculate the equivalent units.

3) Identify the total cost.

4) Calculate the average cost per equivalent unit.

5) Record these costs to finished units and Work in Process units.