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5 April, 07:46

Cost of goods manufactured $68,250 Direct materials used 27,000 Direct labor incurred 25,000 Work in process inventory, January 1 11,000 Factory overhead is 75% of the cost of direct labor. Work in process inventory on December 31 is a.$13,500 b.$18,750 c.$16,250 d.$8,500

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  1. 5 April, 10:11
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    Correct answer is a.$13,500.

    Explanation:

    To calculate work in process ending inventory we will add opening balance of work in process to all cost transferred to work in process during the period. The cost of good manufactured is subtracted from it. Cost of good manufactured become part of finished good inventory. Detail calculation is given below.

    WIP opening balance $ 11,000

    Direct Material $ 27,000

    Direct Labour $ 25,000

    FOH $ 18,750 (75% * 25,000)

    Cost of goods manufactured ($68,250)

    WIP ending balance $ 13,500
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