Asked by ashok Gadiparthi on May 11, 2024
Verified
In February, one of the processing departments at Encinias Corporation had beginning work in process inventory of $27,000 and ending work in process inventory of $21,000.During the month, $316,000 of costs were added to production and the cost of units transferred out from the department was $322,000.The company uses the FIFO method in its process costing system.
Required:
Construct a cost reconciliation report for the department for the month of February.
FIFO Method
"First In, First Out", an inventory valuation method where goods produced or acquired earliest are sold or used first.
Cost Reconciliation
involves accounting procedures that verify the accuracy of the reported costs, ensuring that the total costs recorded match the actual expenses incurred.
Process Costing
An accounting method used when producing identical or similar products, assigning costs based on the processing phase.
- Develop cost reconciliation statements.
- Determine the expenses associated with concluding work in process inventory and the costs related to units dispatched using the FIFO technique.
Verified Answer
Learning Objectives
- Develop cost reconciliation statements.
- Determine the expenses associated with concluding work in process inventory and the costs related to units dispatched using the FIFO technique.
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