In November, one of the processing departments at Goodsell Corporation had beginning work in process inventory of $36,000 and ending work in process inventory of $35,000. During the month, $427,000 of costs were added to production and the cost of units transferred out from the department was $428,000. The company uses the FIFO method in its process costing system. In the department's cost reconciliation report for November, the total cost to be accounted for would be:
A)$890,000
B)$71,000
C)$463,000
D)$926,000

Question

Quizplus · Accepted Answer

The total cost to be accounted for in a process costing system is the sum of the beginning work in process inventory and the costs added during the period. Using the FIFO method, the cost of units transferred out is based on the costs of the units completed first, which would include the beginning work in process inventory.

Total cost to be accounted for = Beginning work in process inventory + Costs added during the period 
Total cost to be accounted for = $36,000 + $427,000 
Total cost to be accounted for = $463,000

Therefore, the best choice is C, $463,000.

In November, One of the Processing Departments at Goodsell Corporation