Question

In July, one of the processing departments at Okamura Corporation had beginning work in process inventory of $17,000 and ending work in process inventory of $22,000. During the month, the cost of units transferred out from the department was $152,000. In the department's cost reconciliation report for July, the total cost to be accounted for under the weighted-average method would be:

Answer 1

Costs accounted for as follows:
Cost of Units Transferred Out	$     1,52,000.00
Cost of Ending Wip	$       22,000.00
Total cost accounted for	$     1,74,000.00

Total cost to be accounted for = $174000

.

In weighted average method total cost to be accounted for is calculated in two ways

1. Cost of beginning inventory in WIP plus Cost incurred during year
2. Cost of ending inventory in WIP plus cost of goods transferred out.

Second method is applicable in the above case.