Question

January​ 1, Biden,​ Inc.'s WorkminusinminusProcess Inventory account had a balance of $ 30 comma 800. During the​ year, $ 58 comma 500 of direct materials was placed into production. Manufacturing wages incurred amounted to $ 85 comma 000​, of which $ 66 comma 000 were for direct labor. Manufacturing overhead is allocated on the basis of​ 120% of direct labor cost. Actual manufacturing overhead was $ 91 comma 200. Jobs costing $ 220 comma 700 were completed during the year. What is the December 31 balance of WorkminusinminusProcess ​Inventory? A. $ 13 comma 800 B. $ 234 comma 500 C. $ 30 comma 800 D. $ 155 comma 300

Answer 1

Answer:

Option (A) is correct.

Explanation:

Given that,

Direct materials = $58,500

Direct labor = $66,000

Manufacturing overhead = 120% of direct labor cost

Opening WIP = $30,800

Cost of goods manufactured:

= Direct materials + Direct labor + Manufacturing overhead

= $58,500 + $66,000 + 120% of direct labor cost

= $58,500 + $66,000 + (120% × $66,000)

= $58,500 + $66,000 + $79,200

= $203,700

December 31 balance of Work-in-Process ​Inventory:

= Opening WIP + cost of goods manufactured - cost of goods completed

= $30,800 + $203,700 - $220,700

= $13,800