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A food processing company has two sequential production departments: mixing and cooking. The cost of the January 1 work in process in the cooking department is as follows:
Direct material $79,000
Conversion 30,000
Transferred-in costs 182,000
During what time period and in what department were the $182,000 of cost shown above incurred? Justify your answer.
What is the difference between transferred-in costs and costs of units completed and transferred. Cite an example of each. (300 words)
Chapter 5
Why do product-costing systems based on a single, volume-based cost driver tend to overcost high-volume products? What undesirable strategic effects can such distortion of product costs have? Explain your answer and provide an example.
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