Question

In July, one of the processing departments at Junkin Corporation had beginning work in process inventory of $29,000 and ending work in process inventory of $31,000. During the month, $205,000 of costs were added to production and the cost of units transferred out from the department was $203,000. Required: Construct a cost reconciliation report for the department for the month of July.

Answer 1

Answer and Explanation:

The construction of the cost reconciliation report for the department for the month of July is shown below:

Cost to be Accounted For :

Beginning Work in process inventory $29,000

Add: Cost added to production $205,000

Total Cost to Be accounted For $ 234,000

Cost Accounted for as Follows

Cost of Ending Work in process inventory $31,000

Add: Cost of units Transferred Out $203,000

Total Cost Accounted For $234,000

The total cost accounted for could be computed by two methods

1. Adding the cost added to the beginning work in process inventory

2. Adding the cost of units transferred out to the ending work in process inventory