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16 March, 05:33

Davy Company had a beginning work in process inventory balance of $32,000. During the year, $54,500 of direct materials was placed into production. Direct labor was $63,400, and indirect labor was $19,500. Manufacturing overhead is applied at 125% of direct labor costs. Actual manufacturing overhead was $86,500, and jobs costing $225,000 were completed during the year.

What is the ending work in process inventory balance?

a. $172,000

b. $ 11,400

c. $ 4,150

d. $ 79,250

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Answers (1)
  1. 16 March, 08:09
    0
    Option (b) is correct.

    Explanation:

    Given that,

    Beginning work in process inventory balance = $32,000

    Direct materials was placed into production = $54,500

    Direct labor = $63,400

    Actual manufacturing overhead = $86,500

    Jobs costing completed during the year = $225,000

    Ending work in process inventory balance:

    = Beginning work in process inventory balance + Direct materials was placed into production + Direct labor + Actual manufacturing overhead - Jobs costing completed during the year

    = $32,000 + $54,500 + $63,400 + $86,500 - $225,000

    = $11,400
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