Multiple choice

Directions: Choose the correct option for the given question.

Cost of one process may be transferred to the next process at

  1. cost price

  2. market price

  3. either (1) or (2)

  4. realisable price

  5. none of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In process costing, the transfer of output from one process to the next can be recorded at either the actual cost of production or at a transfer price (which may include a profit margin). Therefore, both options are valid depending on the company's accounting policy.

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