Sorin Corp. uses process costing for its two production departments: Cutting and

Question

Sorin Corp. uses process costing for its two production departments: Cutting and Painting. The company’s manufacturing information for the month of August is provided below:

Cutting

Painting

Beginning work in process

$1,000

$1,200

Costs transferred in

?

?

Costs incurred in Aug

$3,500

$5,000

Ending work in process

$2,000

$2,500

Record the transfer costs from the cutting department to the painting department in Aug.

Record the transfer costs from the painting department to the finished goods inventory account in Aug.

Cutting

Painting

Beginning work in process

$1,000

$1,200

Costs transferred in

?

?

Costs incurred in Aug

$3,500

$5,000

Ending work in process

$2,000

$2,500

Explanation / Answer

Cost of ending WIP =
Cost of Beginning WIP + Costs Transferred-in + Costs Added in Current process Costs Transferred-out.

Transfer cost during the month of Aug 2015 as follows :-

Cutting Painting Beginning work in process $1,000 $1,200 Costs transferred in $0 $2,500 Costs incurred in Aug $3,500 $5,000 Cost transferred out $2,500 $6,200 Ending work in process $2,000 $2,500

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