In December, one of the processing departments at Bonine Corporation had ending work in process inventory of $32,000. During the month, $264,000 of costs were added to production and the cost of units transferred out from the department was $257,000.The company uses the FIFO method in its process costing system.Required:Construct a cost reconciliation report for the department for the month of December.
What will be an ideal response?
Cost of beginning work in process inventory + Costs added to production = Cost of ending working in process inventory + Cost of units transferred out
Cost of beginning work in process inventory + $264,000 = $32,000 + $257,000
Cost of beginning work in process inventory = $32,000 + $257,000 ? $264,000 = $25,000
| Costs to be accounted for: | ||
| Cost of beginning work in process inventory | $ | 25,000 |
| Costs added to production during the month | 264,000 | |
| Total cost to be accounted for | $ | 289,000 |
| Costs accounted for as follows: | ||
| Cost of ending work in process inventory | $ | 32,000 |
| Cost of units transferred out | 257,000 | |
| Total cost accounted for | $ | 289,000 |
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