Transferred-in cost definition
/What is Transferred-In Cost?
Transferred-in cost is the cost that a product accumulates during its tenure in upstream work centers. Thus, it is the accumulated cost of a product when it first arrives in a downstream work center. The transferred-in cost is then treated as the starting cost of the receiving work center, to which additional costs may be added by that work center.
This concept is used in a process costing system.
Example of Transferred-In Costs
Grizzly Golf Carts manufacturers robust golf carts for overweight golfers. Production starts with the frame shop, which bends metal and welds frames before passing these units along to the Engines department. For the company’s latest model, the Grizzly XXL, the frame shop accumulates a cost per unit of $550. This cost becomes the transferred-in cost of the Engines department, which is the starting cost before the costs of the engine and installation labor are included.