Reconciling Activity and Costs

1. At the beginning of the month there are units being worked on in WIP

2. New items are started into production

3. Finished goods are completed and transferred out.

4. The number of units and their costs must be reconciled.

5. For example:

Work in Process -- Department One
Beginning balance 80,000 units
Units started into production 420,000	400,000 units completed and transferred out
100,000 units left in process

________________________________________:

Beginning balance 80,000 + Units started into production 420,000 = 500,000

Units transferred out and ending inventory: 400,000 + 100,000 = 500,000

These two numbers must be ________________________________________.

________________________________________. Total costs from beginning inventory and units started must be split between units completed and units left in ending inventory. However, this isnt just as easy as allocating costs over the 500 units since some of those units are completed and some are not.