In July, one of the processing departments at Keen Corporation had beginning work in process inventory of $19,000 and ending work in process inventory of $18,000. During the month, the cost of units transferred out from the department was $216,000. The company uses the FIFO method in its process costing system.
-In the department's cost reconciliation report for July, the total cost accounted for would be:
A) $37,000
B) $449,000
C) $234,000
D) $468,000

Question

Quizplus · Accepted Answer

The cost of units completed and transferred out can be calculated by subtracting the ending work in process inventory from the sum of beginning work in process inventory and costs added during the period.

Beginning work in process inventory + costs added during the period - Ending work in process inventory = Cost of units completed and transferred out
$19,000 + Costs added during the period - $18,000 = $216,000
Costs added during the period = $216,000 + $18,000 - $19,000 = $215,000

Therefore, the total cost accounted for in the department's cost reconciliation report for July would be:
Beginning work in process inventory + Costs added during the period = $19,000 + $215,000 = $234,000.

The correct answer is C.

In July, One of the Processing Departments at Keen Corporation