Question

The Work in Process Inventory account for DG Manufacturing follows. Compute the cost of jobs completed and transferred to Finished Goods Inventory. Work in Process Inventory DR CR Beginning balance $4,700 Direct materials 47,300 Direct labor 29,800 ? Finished goods Applied overhead 16,000 Ending balance $9,300
The cost of units transferred to finished goods is:

a. $93,100.

b. $97,800.

c. $88,500.

d. $96,000.

e. $107,100.

Answer 1

Answer:

The correct answer is C

Explanation:

The cost of units that are transferred to the finished goods is computed as:

Work in Progress(WIP)  Ending balance = Work in Process Beginning  Inventory + Direct materials + Direct Labor + Applied Overhead - Finished goods

So,

Finished Goods = Work in Process Beginning  Inventory + Direct materials + Direct Labor + Applied Overhead - Work in Progress(WIP)  Ending balance

where

Work in Process Beginning  Inventory is $4,700

Direct materials is $47,300

Direct Labor is $29,800

Applied overhead is $16,000

Work in Progress(WIP)  Ending balance is $9,300

Putting the values above:

Finished Goods = $4,700 + $47,300 + $29,800 + $16,000 - $9,300

Finished Goods = $97,800 - $9,300

Finished Goods = $88,500