In December, One of the Processing Departments at Moshier Corporation

question 57

Essay

In December, one of the processing departments at Moshier Corporation had ending work in process inventory of $24,000. During the month, $293,000 of costs were added to production and the cost of units transferred out from the department was $297,000. The company uses the FIFO method in its process costing system.
Required:
Construct a cost reconciliation report for the department for the month of December.

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Definitions:

Income

The financial gain received by an individual or a business, typically from employment, investments, or sales of goods and services.

Variable Costing

An accounting method that only includes variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs, with fixed overhead expenses charged to the period they arise.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed manufacturing overhead) in the cost of a product.

Net Income

The amount of revenue left over after all expenses and taxes have been deducted.