Using the example below, write and explanation on the transfer cost process ( raw materials to work in process to finished goods to cost of goods sold)

Manufacturing a Car

Materials:

-steel

-plastic

-rubber

Glass

Labor:

-assembly

-painting

-testing

The total cost of making a car is:

Product costs:

Materials: $5,000

Labor: $800

Utilities: $300

Period costs:

Supervisor salary: $1500

Building rent: $1000

Advertising: $100