Question

Sheffield Corp. has beginning work in process inventory of $148000 and total manufacturing costs of $677000. If cost of goods manufactured is $690000, what is the cost of the ending work in process inventory?

Answer 1

Answer:

The cost of the ending work in process inventory is $135,000

Explanation:

The cost of goods manufactured is the cost of all the units manufactured. It includes all the direct costs and overheads of the goods manufactured at the end of a period.

Use the following formula to calculate the cost of the ending work in process inventory

Cost of Goods Manufactured = Total Manufacturing cost + Begininning Work in process - Ending work in process

Where

Cost of goods manufactured = $690,000

Total manufacturing costs = $677,000

Beginning work in process inventory = $148,000

Placing values in the formula

$690,000 = $677,000 + $148,000 - Ending work in process

$690,000 = $825,000 - Ending work in process

Ending work in process = $825,000 - $690,000

Ending work in process = $135,000