In the Accounting for Costs in a Process Costing System

In the accounting for costs in a process costing system, which statement below is most correct as to when costs are added in processing departments?

A) labour and overhead costs are added in each department as processing takes place but materials costs are only added in the last processing department when the final quantities of materials used have been determined.
B) all material costs will be added in the first processing department and labour and overhead costs will be added in subsequent departments.
C) material, labour and overhead costs may be added in any processing department.
D) material and labour costs may be added in any department but overhead costs will only be added in the last processing department in which the processing of the product is completed.

Correct Answer:

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