Question

Texas Plating Company reported a cost of goods manufactured of $524,000, with the firm's year-end balance sheet revealing work in process and finished goods of $79,000 and $138,000, respectively.
a. If supplemental information disclosed raw materials used in production of $89,000, direct labor of $145,000, and manufacturing overhead of $247,000, the company's beginning work in process must have been ___________.

Answer 1

Answer:

Beginning WIP= 122,000

Explanation:

Giving the following information:

Cost of goods manufactured= $524,000

Ending work in process= $79,000

Raw materials used in the production of $89,000

Direct labor of $145,000

Manufacturing overhead of $247,000

To calculate the beginning work in process we need to use the cost of goods manufactured formula:

cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

524,000= Beginning wip + 89,000 + 145,000 + 247,000 - 79,000

Beginning WIP= 122,000