Flow of costs through Work in Process Inventory (Learning Objective 1)

True-Tile produces its product in two processing departments: Forming and Finishing. The following T-account shows the Forming Department’s Work in Process Inventory at August 31 prior to completing the five-step process costing procedure:

Requirements 1. What is the Forming Department’s “Total costs to account for” for the month of August?
2. Assume that after using the five-step process costing procedure, the company determines that the “cost to be assigned to units completed and transferred out” is $243,800. What journal entry is needed to record the transfer of costs to the Finishing Department?
3. After the journal entry is made, what will be the new ending balance in the Forming Department’s Work in Process Inventory account?

Transcribed Image Text:

Work in Process Inventory-Forming Department Beginning Balance Direct materials used $ 53,250 78,360 14,920 Manufacturing overhead allocated 126,250 Direct labor