Process Costing with Sequential Production Departments

At many manufacturing firms, the product passes through multiple production departments as it being produced. If the manufacturer uses process costing, then the work-in-process inventory of one department eventually becomes the work-in-process inventory of the next department to work on the product. For example, if Department A accumulates $800 of work-in-process inventory and then transfers all of the work-in-process units to Department B, then Department B's work-in-process inventory account will increase by $800. Department B will then add its own manufacturing costs to the product, increasing Department B's work-in-process inventory account even further. Thus, when you do process costing with sequential production departments, each department has its own work-in-process inventory account.-
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