CHAPTER 4 Process costing systems
1. Features of Process Costing:
The objective of process costing is to find out the cost of each process by identifying the direct
costs with the particular process and apportioning the indirect costs i.e. overheads to each
process on some suitable basis.
The important features of process costing are:
i.
The production is continuous and mass production and the final product is the result
of a sequence of processes or departments.
ii.
Costs are accumulated by processes or operations or department.
iii.
The products are standardized and homogeneous.
iv.
The cost per unit produced is the average cost which is calculated by dividing the
total process cost by the number of units produced
v.
The finished product of each but last process becomes the row material for the next
process.
2. Similarities and Difference between Process and Job order Costing
As discussed in the previous section, the production process influences the choices of cost
accounting system. Firms producing distinct and unique products use job order costing system
where as firms producing similar or identical units use process-costing system. Process costing
system accumulate costs by departments for a period of time, just as a job order costing system
accumulate costs by jobs, and the total cost will be assigned to the units produced in that period.
Process costing system is product costing system which is applied when identical units are
produced in mass. Identical units are assumed to take the same amount of direct material, direct
labor & manufacturing overhead. These costs are accumulated over a period of time and the total
cost is assigned to units produced in the period the cost is accumulated. In process costing
system, each unit is assumed to take equal amount of direct material, direct labor and
manufacturing overhead. The difference between job order and process costing system is, thus,
the extent of the averaging used to compute unit cost. In job order costing each job differs in
terms of material used, labor incurred, and manufacturing overhead. Hence, it is impossible to
assign the same cost for different jobs. On the contrary, identical units produced in mass take
equal amount of direct material, direct labor, and manufacturing overhead. Thus, the unit cost
can be found by dividing total cost by the number of units produced.
When a firm produces identical lots of goods repetitively, maintaining a separate job cost sheet
would be unnecessarily expensive. The aggregate cost and the unit cost can be computed without
a job cost sheet, thus saving the cost associated with producing such records. Costs are
accumulated by departments over a certain period and the unit cost can be found by dividing the
total cost to the units produced during that period. Process costing system fit among others to,
paint manufacturers; oil refineries, sugar refineries, and salt producers.
The difference between job order and process costing arise from two factors. The first is that, the
flow of units in process costing system is more or less continuous, and the second is that these
units are indistinguishable from one another. Under process costing, it makes no sense to try to
identify material, labor and overhead costs with a particular order from customers as we did in
job order costing system, since each order is just one of the many that are filled from a
continuous flow of virtually identical units from the production line. Under process costing, we
accumulate costs by department, rather than by order, and assign these costs equally to all units
that pass through the department during the period.
A further difference between the two costing system is that the job order cost sheet has no use in
process costing, since the focal point of that method is on department. Instead of using job order
cost sheets, a document known as cost of production report is prepared for each department in
which work is done on products. The production report serves several functions. It provides a
summary of the number of units moving through a department during a period, and it also
provides a computation of unit costs. In addition, it shows what costs were charged to the
department and what disposition was made of these costs. The department production report is a
key document in process costing system. The major difference between job order and process
costing systems is summarized in the table below.
Base
comparison
of Job order costing
Process costing
Type
of Diversified, heterogeneous and Homogeneous
products
produced
product
unique products
continuously
Cost
By job for a specified number of
By department or cost center for a
accumulation
units
specified period of time
Work
in One for each job
One for each department
process
Basic
Job cost sheet for each job
document
Cost of production report for each
department or cost centers
Cost per unit
Cost accumulated by job divided Cost accumulated by cost centers divided
by units in job
by equivalent unit of production during a
period of time
Reporting
Nature
By job
By cost center or department
of Each job may use different Each units produced uses the same
costs for each amount of material, labor and standard amount of materials, labor and
cost object
overhead cost
overhead cost
It is important to recognize that much of what was learned in the preceding section about costing
and about cost flows equally applies well to process costing in this section. That is, we are not
throwing out all that we have learned about costing and starting from scratch with a whole new
system. The similarities that exist between job orders costing and process costing can be
summarized as follows:

The same basic purposes exist in both systems, which are to assign material, Labor, and
overhead cost to products and to provide a mechanism for computing unit cost.

Both systems maintain and use the same basic manufacturing account including
manufacturing overhead, raw material, work in process and finished goods.

The flow of costs through the manufacturing accounts is basically the same in both
systems. As can be seen from these comparisons, much of the knowledge that we have
already acquired about costing is applicable to process costing system. our task is simply
to refine and extend this knowledge to process costing

In process costing system, direct material, labor, and manufacturing overhead costs are
accumulated in the same way as job order costing system. However, the costs are
accumulated by department over some period of time than by individual jobs. The time
period over which the cost is to be accumulated depends on the information needs of the
company. It can be a week, two weeks, but no longer than a month most often. aCost
accumulation is much simpler in process costing system than in job order costing.
 Process-Costing Assumptions
 Direct Materials are added at the beginning of the production process, or at the start of
work.
 Conversion Costs are added equally along the production process
 The total units to account for must be equal to the total units accounted for.
3. Preparing cost of production report
The cost of production report is an analysis of the activity of a department for a given period.
The cost of production report for each department may be prepared following the five-step
approach. Each step presents a separate schedule. These schedules are:
Step 1: Summarize the flow of physical units of output.
Step 2: Compute output in terms of equivalent units.
Step 3: Summarize total costs to account for.
Step 4: Compute cost per equivalent unit.
Step 5: Assign total costs to units completed and to units in ending work in process.
A. Flow of physical units (quantity schedule)
This schedule shows the physical flow of units into and out of departments. The total units to
account for must be equal to the total units accounted for.
B. Equivalent units (EU) schedule
Equivalent Units
 A derived amount of output units that:
Equals the total units completed plus incomplete units (WIP) restated/or expressed in
terms of completed units.
 Are calculated separately for each input (direct materials and conversion cost)
Labor
+ overhead
Materials + Labor
+ Overhead
Conversion Costs
C. Cost to account for schedule
This schedule shows the costs which are charged to or accumulated by the department.
Costs to be account for in each processing department consist of:
1. Costs of the beginning work in process inventory in the department.
2. Costs added during the period.
a. Costs of units transferred in from a preceding department.
b. Costs added in the department itself.
D. Cost per equivalent unit schedule
This schedule shows us cost per equivalent unit for each cost categories i.e. cost for direct
material and conversion cost.
E. Assignment of costs to units completed and to ending WIP inventories.
This schedule shows the distribution of accumulated costs to units completed and
transferred and to units still in process. The total cost to account for must be equal to the
total costs accounted for.
These total cost accounted for will assign to:
1. Ending work in process inventory in the department.
2. Units completed and transferred out to the next department (or to finished
goods).
 Illustrating Process Costing
Case one: process costing with no beginning or ending WIP inventory.
This means all units are started and fully completed by the end of the accounting period. This
case illustrates the basic averaging of costs- a key feature of process costing system.
Case two: process costing with no beginning WIP inventory but with ending WIP
inventory.
This is some units started during the accounting period are incomplete at the end of the period.
This case introduces the concept of equivalent units.
Case three: process costing with both beginning and ending WIP inventory.
This case describes the effect of weighted average and first-in-first-out (FIFO) cost flow
assumptions on cost of units completed and cost of WIP inventory.
Case one: process costing with no beginning or ending WIP inventory.
The simplest case for assigning costs using a process costing approach assumes all products are
started and completed within a single accounting period. This assumption makes it easier to see
how materials and conversion costs are used and applied to units of product. If all units of
products are completed in one month, there is no WIP inventory. It is the presence of WIP
inventory that makes process costing complex.
Example 1
XYZ Company manufactures its products in two departments: Dep’t A and Dep’t B. the
company started operation at the beginning of January, 2004 E.C. the following information
belongs to Dep’t A for January 2004 is:
Physical units for January 2004
WIP beginning inventory (January 1)………………..….. 0 units
Started during January ………………………………….. 60,000 units
Completed and transfer out during January ……..………. 60,000 units
WIP ending inventory (January 31) ………………….…… 0 units
Total cost for January
Direct material cost added during January …………… Birr 30,000
Conversion costs added during January ……………... birr 60,000
Required: prepare a cost of production report to department A of XYZ Company for January
and necessary journal entries.
XYZ Company records direct material costs and conversion costs in the Dep’t A as these costs
are incurred. By averaging, Dep’t A cost of products is Birr 90,000 ÷ 60,000 units= Birr 1.5 per
unit, itemized as follows:
Direct material cost per unit (Birr 30,000 ÷ 60,000 units) ………………….. 0.5
Conversion cost per unit (Birr 60,000 ÷ 60,000 units) ……………………… Birr 1
Department A cost per unit………………………………………………….. Birr 1.5
Journal entries
1. Work-in-process-Dep’t A ………………….Birr 30,000
Raw materials inventory ……………………….. Birr 30,000
(To record direct materials purchase and used in production during January)
2. Work-in-process-Dep’t A ………………… Birr 60,000
Various accounts…………………………………. Birr 60,000
(To record conversion costs for January; example includes energy, manufacturing supplies, all
manufacturing labor, and plant depreciation.)
3. Work-in-process-Dep’t B………………….. Birr 90,000
Work-in-process-Dep’t A ……………………………… Birr 90,000
(To record cost of goods completed and transferred from Dep’t A to Dep’t B during Jan)
Case-1 shows that in a process costing system, average unit costs are calculated by dividing total
costs in a given accounting period by total units produced in the period. Because each unit is
identical, we assume all units receive the same amount of direct material costs and conversion
costs. Case-1 applies whenever a company produces a homogeneous product or service but has
no incomplete units when each accounting period ends, which is a common situation in service
organizations.
Case two: process costing with no beginning WIP inventory but with ending WIP
inventory.
A slightly more complex case for process costing occurs when there is production that is not
completed at the end of accounting period. In another word, there is no beginning WIP
inventory, but there is some ending WIP inventory.
Example 2
In February, 2004 E.C. XYZ Company places 60,000 units of products in to production. Because
all units placed in to production in January were completely finished, there is no beginning
inventory of partially completed units in Dep’t A on February 1. Prepare cost of production
report for Dep’t A for February based on the following information that pertains to Dep’t A for
February.
Units of data for the month of February:
WIP at the beginning …………………………………………. 0 units
Started during February ……………………………………… 60,000 units
Completed and transfer out during February ………….…….. 40,000 units
Units still in process at the end ………………………….…... 20,000units
Degree of completion of ending WIP inventory, DM 100%, CC 40%
Total costs added during February
Direct material ………………………….. Birr 42,000
Conversion cost ………………………… Birr 43,200
XYZ Company
Cost of production report- Dep’t A
For the month ended February 28, 2004
Step-1
Step-2
Equivalent Units (EU)
Physical units
Materials
Conversion
Flow of production
WIP inventory beginning
0
Started during current period
60,000
To account for
60,000
Completed and transferred out
40,000
40,000
40,000
WIP ending (20,000*100%, 20,000*40%)
20,000
20,000
8,000
Account for
60,000
60,000
48,000
Total
Direct
Conversion
Step-3
production cost
materials
cost
Cost added during February
85,200
42,000
43,200
Total cost to account for
85,200
42,000
43,200
85,200
42,000
43,200
current period
60,000
48,000
Cost per equivalent unit
0.7
0.9
Work done in current period only
Step-4
Cost added in current period
Divided by equivalent units of work done in
Step-5 : assignment of costs
Completed and transfer out(40,000 units)
Birr 64,000
40,000*0.7
40,000*0.9
Work-in-process ending (20,000 units)
Birr 21,200
20,000*0.7
8,000*0.9
Total cost accounted for
Birr 85,200
Journal entries
i. Work-in-process-Dep’t A ………………….Birr 42,000
Raw materials inventory ……………………….. Birr 42,000
(To record direct materials purchase and used in production during February)
Work-in-process-Dep’t A ………………… Birr 43,200
ii.
Various accounts …………………………………. Birr 43,200
(To record conversion costs for January; example includes energy, manufacturing supplies, all
manufacturing labor, and plant depreciation.)
iii.
Work-in-process-Dep’t B………………….. Birr 64,000
Work-in-process-Dep’t A ………..………………………… Birr 64,000
(To record cost of goods completed and transferred from Dep’t A to Dep’t B during Feb)
Case three: process costing with both beginning and ending WIP inventory.
Since production is usually continuous and some units still being in process at the end of a
period, ending WIP inventory of the last period becomes beginning inventory of WIP in this
period.
The existence of beginning WIP inventory creates a problem in process costing because the
following questions must be considered.
a) Should a distinction be made between completed units from beginning WIP inventory&
from current period?
b) Should cost of beginning WIP inventory be added to costs of the current period?
c) Should all units completed during the current period be included 100% in equivalent
production regardless of the stage of completion?
The answer to the above questions will depend on the method chosen to account for beginning
WIP inventory. There are two common methods of computing average costs per unit are the
weighted average method and the FIFO method.
I. Weighted-Average Method
 Calculates cost per equivalent unit of all work done to date (regardless of the accounting
period in which it was done)
 Assigns this cost to equivalent units completed & transferred out of the process, and to
incomplete units in still in-process
 Weighted-average costs is the total of all costs in the Work-in-Process Account divided
by the total equivalent units of work done to date
 The beginning balance of the Work-in-Process account (work done in a prior period) is
blended in with current period costs
 For each category of cost in each processing department the following calculations are
made:
Costs to be Accounted for = costs of beginning WIP inventory + costs added during current
period
Equivalent unit = Physical unit x Percentage of completion
Equivalent units of production = units transferred out + Equivalent units of ending WIP
inventory
 Units transferred out of the department are 100% complete with respect to the work done in
the department.
Cost per EU = costs to be accounted for
Equivalent units of production
Costs of units Transferred out = units transferred out X cost
per EU
Costs of units in ending WIP inventory = EUs of ending WIP inventory X cost per EU
Example 3: The following data are for the first processing department at Midwest Refining, a
company that reclaims petroleum products from used motor oil.
Units
Materials
Conversion
Percentage completion ..................................
60%
50%
Cost of beginning inventory ..........................
$4,300
$7,600
Work in process, beginning:
Units in process ............................................. 10,000
Units started into production ............................. 190,000
Costs added in the department during the
current period ................................................
Units completed and transferred ....................... 180,000
$74,100
$140,400
80%
25%
Work in process, ending:
Units in process ............................................. 20,000
Percentage completion ..................................
Required:
Prepare a cost of production report to department A of XYZ using weighted average and FIFO
method.
XYZ Company
Cost of production report- Dep’t A (weighted average)
Step-1
Step-2
Equivalent Units (EU)
Physical units
Materials
Conversion
Flow of production
WIP inventory beginning
10,000
Started during current period
190,000
To account for
200,000
Completed and transferred out
180,000
180,000
180,000
WIP ending (20,000*80%, 20,000*25%) 20,000
16,000
5,000
Accounted for
200,000
Work done to date
196,000
185,000
Total
Direct
Conversion
Step-3
production cost materials
cost
Work-in-process beginning
11,900
4,300
7,600
Cost added during February
214,500
74,100
140,400
Total cost to account for
226,400
78,400
148,000
Step-4
Cost incurred to date
78,400
148,000
Divided by equivalent units of work done
in current period
196,000
185,000
Cost per equivalent unit
0.4
0.8
Step-5 : assignment of costs
Completed and transfer out(180,000 Birr216,000
180,000*0.4
180,000*0.8
units)
Work-in-process ending (20,000 units)
16,000*0.4
5,000*0.8
Birr 10,400
Total cost accounted for
Birr 226,400
Note: The quantity schedule is based on the following equation:
Units in beginning work in process
+
Units started into production
=
Units transferred out
+
Units in ending work in process
II. FIFO Method
 The FIFO method separates the costs of beginning inventory from the costs incurred
during the current period. (The weighted-average method combines them.)
 The beginning balance of the Work-in-Process account (work done in a prior period) is
kept separate from current period costs.
 FIFO assumes the beginning inventory is completed before any new units are started.
 Assigns the cost of the previous accounting period’s equivalent units in beginning workin-process inventory to the first units completed and transferred out of the process.
 Assigns the cost of equivalent units worked on during the current period first to complete
beginning inventory, next to start and complete new units, and lastly to units in ending
work-in-process inventory.
Formulas for to compute equivalent units of production in FIFO method
A separate calculation is made for each cost category in each process department.
Costs to be
Costs of
Costs added
accounted = beginning WIP + during the
for
inventory
current period
Equivalent units of production = equivalent units to complete beg. WIP Inventory*
+
Units started & completed during the period
+
Equivalent units in ending WIP inventory.
Equivalent
Units
Equivalent units
units of = transferred + of ending WIP
production
out
inventory
*Equivalent units to complete beg. WIP inv = WIP in beg. Inv. × (100 – percentage
completion of beg. WIP inventory.
Or, the equivalent units of production can also be determined as follows:
Equivalent units of production = Units started & completed during the period
+
Equivalent units in ending WIP inventory
Equivalent units in beg. WIP Inventory
Cost per EU = cost added during current period only
EU of Work done in current period only
Costs of units =
Units
× Cost
transferred out
transferred out
per EU
Costs of units in
= Equivalent units of × Cost
ending WIP inventory
ending WIP inventory
per EU
XYZ
Company
Costs added to complete EU of beg.
= EU
of beg WIP inventory× cost per EU
Cost of production report- Dep’t A (FIFO method)
Step-1
Step-2
Equivalent Units (EU)
Physical units
Materials
Conversion
Flow of production
WIP inventory beginning
10,000
Started during current period
190,000
To account for
200,000
Completed and transferred out
From beginning WIP inventory*
10,000
4,000
5,000
Started and completed†
170,000
170,000
170,000
Work-in-process ending
20,000
16,000
5,000
accounted for
200,000
190,000
180,000
Total
Direct
Conversion
Step-3
production cost
materials
cost
Work-in-process beginning
11,900
Work
Work done in current period only
period
done
in
previous
Cost added during February
85,200
74,100
140,400
Total cost to account for
214,500
74,100
140,400
214,500
74,100
140,400
190,000
180,000
0.39
0.78
4,300
7,600
4,000*0.39
5,000*0.78
Step-4
Cost added in current period only
Divided by equivalent units of work done in
current period
Cost per equivalent unit
Step-5 : assignment of costs
Completed& transferred out(180,000)
WIP beginning inventory(10,000 units)
11,900
Cost added to beginning WIP inv. In 5,460
current period
Total cost from beginning WIP inventory
17,360
Started and completed (170,000 units)
198,900
Total
cost
of
units
completed
170,000*0.39 170,000*0.78
& 216,260
transferred out
WIP ending (20,000 units
10,140
Total cost accounted for
214,500
*
Materials:
10,000
×
(100%
16,000*0.39
–
60%)
=
5,000*0.78
4,000
EUs
Conversion: 10,000 × (100% – 50%) = 5,000 EUs
†
190,000 units started – 20,000 units in ending WIP = 170,000 units
 Transferred in Cost
Many process-costing systems have two or more departments or processes in the production
cycle. As units move from department to department, the related cost is also transferred by
monthly journal entries. If standard costs are used, accounting for such transfers is simple.
However, if the weighted-average or FIFO method is used, the accounting can become more
complex.
Conversion cost added
Evenly during the process
Assembly
Department
WIP
Transfer
Finishing
Department
Direct material
Added at the end
Transferred-in costs (also called previous departments’ cost) are the cost incurred in the previous
process in the production cycle. That is, as the units move from one department to the next, their
costs are transferred with them. Computations of finishing department costs consist of
transferred-in costs as well as the direct materials and conversion costs added in finishing
department. Transferred-in cost is treated as if it is a separate type of direct material added at the
beginning of the process. When successive departments are involved, transferred units from one
department become all or part of the direct materials of the next department; however, they are
called transferred-in costs not direct materials costs.
Transferred-In costs and the Weighted-Average Method
To examine the weighted-average process-costing method with transferred-in costs, we use the
five-step procedure described earlier to assign costs of the finishing department to units
completed and transferred out and to units in ending work in process. Let us assume the
following data for SNAP computer for the month of April, 2008.
Illustration 4: The assembly department of SNAP computer transfers assembled units to its
finishing department. Here, the units receive additional direct material such as crating and other
packing material to prepare the units for sell at the end of the process. Conversion costs are
added evenly during the process. As units are completed in finishing department, they are
immediately transferred to finished goods.
Physical units
WIP beginning -----------------------------
240 units
Transferred in Cost (100% complete)
Direct material (0% complete)
Conversion cost (62.5% complete)
Transferred in during April --------------
400 unit
Completed during April ------------------------- 440 unit
WIP ending ---------------------------------------200 units
Transferred in Cost (100% complete)
Direct material (0% complete)
Conversion cost (80% complete
Cost for finishing department in April:
WIP beginning
Transferred In cost --------------------------Br.672, 000
Direct materials ---------------------------------Conversion cost
0
---------------------------- 360,000
Transferred in during April:
Under WA method -------------------------------Br.1, 040,000
Under FIFO method -----------------------------
1, 049,600
Direct material cost added during April --------- -- --
13,200
Conversion cost during April ----------------------- ---
48,600
The production report for the month of April for finishing department can be prepared under
weighted average method as follow:
(Step 1)
Flow of production
Physical flow
Work in process beginning
240
(Step 2)
Units started in current period
400
Equivalent Units
Transferred
Direct
Conversion
640
in cost
material
costs
transferred out:
440
440
440
440
Work in process ending
200
200
0
160
Units accounted for
640
-
-
-
440
600
Units to account for
Units
completed
and
Work done in current period
only
(Step 3): Cost summary
640
Work in process beginning
Br. 1,032,000
Br. 672,000
0
Br. 360,000
Costs added during March
1,101,800
1, 040,000
13,200
48,600
Total cost
Br. 1,712,000
Br. 13,200
408,600
Divide by equivalent units
÷ 640
÷ 440
÷ 600
Cost per equivalent units
Br. 2,675
Br. 30
Br. 681
(Step 4)
Total cost to account for
Br.2,133,800
(Step 5) Assignment of cost:
To completed units (440 units) Br.1,489,840
(440×2,675) + (440×30) + (440×681)
To work in process ending
(200×2675) + (0×30) + (160×681)
(200 units)
643,960
Total cost accounted for
Br. 2,133,800
The computations are the same as the calculations of equivalent units under the weightedaverage method for the assembly department, but here we also have transferred-in costs as
another input. The units, of course are fully completed as to transferred-in costs carried forward
from the previous process. Direct material costs have a zero degree of completion in both the
beginning and ending work-in process inventories because, in finishing department direct
materials are introduced at the end of the process. Beginning work in process and work done in
the current period are combined for purposes of computing equivalent-unit costs for transferredin costs, direct material costs and conversion costs. The necessary journal entries for the month
of April in the finishing department are given as follows:
Work
In
process
– 13,200
Finishing
Raw material control
13,200
(To record the use of direct materials in the production process)
Work In process – Finishing
48,600
Various accounts
48,600
To record the use of conversion cost in the production process)
Finished Goods
1,489,840
Work
in
process
–
1,489,840
Assembly
(To record the transfer of completed products from finishing department to warehouse)
2. Transferred-In Costs and the FIFO Method:
The cost of production report for finishing department for the month of April can be prepared
using FIFO method as follows:
(Step 2)
(Step 1)
Flow of production
Physical flow
Work in process beginning
240
Units started in current period
400
Equivalent Units
Transferred
Direct
Conversio
640
in cost
material
n costs
From WIP Beginning
240
0
240
90
Started and completed
200
200
200
200
WIP Ending
200
200
0
160
Units accounted for
640
-
-
-
440
450
Units to account for
Units completed
Work done
in current period
400
only
(Step 3): Cost summary
Work in process beginning
Br. 1,032,000
Incurred last month
Costs added during March
1,111,400
Br.1, 049,600
Br. 13,200
48,600
Divide by equivalent units
÷ 400
÷ 440
÷ 450
Cost per equivalent units
Br. 2,624
Br. 30
Br. 108
(Step 4)
Total cost to account for
2,143,400
(Step 5) Assignment of cost:
To completed units (440 units)
From WIP Beginning (240 units)
Br.1,032,000
Cost added to WIP Beginning
16,920
Total from beginning Inventory
Br. 1,048,920
Started and completed
552,400
Total cost of units completed
Br. 1,601,320
To WIP ending (200 units)
542,080
Total cost accounted for
Br.2,143,400
(0×2,624) + (240×30) + (90×108)
(200×2,624)+(200×30)+ (200×108)
(200×2,624) + (0×30) + (160×108)
To examine the FIFO process-costing method with transferred-in costs, we again use the five
step procedure. Other than considering transferred-in costs in the computations of equivalent
units, the remaining are the same as under the weighted average method for the assembly
department. The necessary journal entries for the month of April in the finishing department are
given as follows:
Work
In
process
– 13,200
Finishing
Raw material control
13,200
(To record the use of direct materials in the production process)
Work In process – Finishing
48,600
Various accounts
48,600
To record the use of conversion cost in the production process)
Finished Goods
Work
in
1,601,320
process
–
1,601,320
Assembly
(To record the transfer of completed products from finishing department to warehouse)