Question

The Machining Department started the current month with beginning goods in process inventory of $10,000. During the month, it was assigned the following costs: direct materials, $76,000; direct labor, $24,000; and factory overhead, 50% of direct labor cost. Also, inventory with a cost of $109,000 was transferred out of the department to the next phase in the process. The ending balance of the Goods in Process Inventory account for the Machining Department is:A. $13,000B. $1,000C. $49,000D. $110,000E. $3,000

Answer 1

Answer:

ending = A. 13,000

Explanation:

We frist construct the production sheet for the period

Beginning WIP                         10,000

cost added

materials             76,000

labor                    24,000

overhead

50% of labor

50% of 24,000 =  12,000

total cost added                     112,000

ending WIP                                 (??)

transferred-out                      109,000

from the production sheet we solve for ending WIP

beginning + cost added - ending = transefrred-out

10,000 + 112,000 - ending = 109,000

10,000 + 112,000 - 109,000 = ending

ending = 13,000