Asked by TEDDY VELISSARIS on May 21, 2024
Verified
In April, one of the processing departments at Terada Corporation had beginning work in process inventory of $36,000 and ending work in process inventory of $42,000. During the month, $259,000 of costs were added to production and the cost of units transferred out from the department was $253,000. In the department's cost reconciliation report for April, the total cost to be accounted for under the weighted-average method would be:
A) $78,000
B) $295,000
C) $590,000
D) $554,000
Weighted-Average Method
An inventory costing method that calculates the cost of goods sold based on the average cost of all items available for sale during the period.
Cost Reconciliation
Cost reconciliation is the process of analyzing and adjusting the differences between the actual costs incurred and the standard or budgeted costs to understand variances in manufacturing or production activities.
Process Costing
Process costing is a method of costing used by companies that produce similar or homogenous products, where costs are accumulated over a period and then allocated to units of product.
- Determine and compute expenses related to units transferred out and units present in closing inventory.
Verified Answer
Beginning work in process inventory + Costs added to production = Total cost to be accounted for
$36,000 + $259,000 = $295,000
This is the total cost of the beginning work in process inventory, the costs added to production, and any costs that may have been incurred in the department during the month. The cost of units transferred out is not included in this calculation. Therefore, the correct answer is B.
Learning Objectives
- Determine and compute expenses related to units transferred out and units present in closing inventory.
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