Question

Wavy Company had a beginning work in process inventory balance of

$ 32 comma 800$32,800.

During the year,

$ 55 comma 300$55,300

of direct materials was placed into production. Direct labor was

$ 64 comma 200$64,200 ,

and indirect labor was

$ 20 comma 400$20,400.

Manufacturing overhead is allocated at

120120 %

of direct labor costs. Actual manufacturing overhead was

$ 86 comma 600$ 86,600,

and jobs costing

$ 225 comma 400$225,400

were completed during the year. What is the ending work in process inventory balance?

Answer 1

Ending work in process inventory =

Beginning Work in progress inventory + Direct materials + Direct labor + Manufacturing overhead (applied) – Cost of goods manufactured

Beginning Work in progress inventory = $32,800

Direct materials = $55,300

Direct labor = $64,200

Manufacturing overhead (applied) = 120% * $64,200 = $77,040

Cost of goods manufactured = $225,400 (given)

Ending work in process inventory = $32,800 + $55,300 + $64,200 + $77,040 - $225,400 = $3,940