Question

On January 1, Jackson, Inc.'s work-in-process inventory account showed a balance of $65,800. During the year, materials requisitioned for use in production amounted to $70,900, of which $67,400 represented direct materials. Factory wages for the period were $209,000 of which $186,600 were for direct labor. Manufacturing overhead is allocated on the basis of 60% of direct labor cost. Actual overhead was $116,340. Jobs costing $353,220 were completed during the year.
Required:
1. The December 31 balance in work-in-process inventory is ______________.

Answer 1

Answer:

$78,540

Explanation:

Given that,

Beginning balance = $65,800

Direct material = $67,400

Direct labor = $186,600

Transfer to finished goods inventory = $353,220

December 31 balance in work-in-process inventory:

= Beginning balance + Direct material + Direct labor + Manufacturing overhead - Transfer to finished goods inventory

= $65,800 + $67,400 + $186,600 + (60% × $186,600) - $353,220

= $65,800 + $67,400 + $186,600 + $111,960 - $353,220

= $78,540