The movement of completed items from manufacturing to finished goods inventories is shown by arrow line 9. According to the process cost summary, the cost of 100,000 completed Profane units is $24,200. This transfer is documented in the following entry.
Description | Debit | Credit |
---|---|---|
Finished Goods Inventory | 24,200 | |
Goods in Process Inventory | 24,200 |
The credit to Goods in Process Inventory decreases the asset balance to reflect the fact that 100,000 units are no longer being manufactured. These units' costs have been moved to Finished Goods Inventory, resulting in a $24,200 rise in this asset. After this item is submitted, the Goods in Process Inventory account still has a balance of $2,860, which is the amount computed in Step 4 before. The cost of products made is the cost of units shifted from Goods in Process Inventory to Finished Goods Inventory. indicates the activity for this period in the Goods in Process Inventory account The account's ending balance matches the cost attributed to the partially finished units in section.
Date | Journal page No. | Description | Debit | Credit | Balance |
---|---|---|---|---|---|
03/31 | balance | 4,620 | |||
04/30 | Direct materials usage | 9,900 | 14,520 | ||
04/30 | Direct labor costs incurred | 5,700 | 20,220 | ||
04/30 | Factory overhead applied | 6.840 | 27,060 | ||
04/30 | Transfer completed product to warehouse | 0 | 24,200 | 2,680 |
Beginning finished goods inventory + Cost of goods manufactured this period = Cost of goods available for sale - Ending finished goods inventory = Cost of goods sold | $6,292 24,200 $30,492 4,840 $25,652 |
---|
Description | Debit | Credit |
---|---|---|
Cost of Goods Sold | 25,652 | |
Finished Goods Inventory | 25,652 |
Date | Journal page No. | Description | Debit | Credit | Balance |
---|---|---|---|---|---|
03/31 | balance | 6,292 | |||
04/30 | Transfer in cost of goods manufactured | 24,200 | 30,492 | ||
04/30 | Cost of goods sold | 25,652 | 4,840 |
Cost Flows Summary
The exhibit depicts GenX’s production cost flows in April. Each of these cost flows, as well as the entries used to record them, has been discussed. The movement of expenses through the accounts corresponds to the flow of manufacturing activities and goods.