Question

The Fabricating Department started the current month with a beginning Work in Process inventory of $11,300. During the month, it was assigned the following costs: direct materials, $77,300; direct labor, $25,300; and factory overhead, 60% of direct labor cost. Also, inventory with a cost of $115,500 was transferred out of the department to the next phase in the process. The ending balance of the Work in Process Inventory account for the Fabricating Department is: Multiple Choice

$70,668.

$67,380.

$186,168.

$13,580.

$113,900.

Answer 1

Solution:
	Answer is 4th option $13,580
Working Notes:
	Ending balance of the Work in Process Inventory
	Beginning Work in Process inventory	11,300	a
Add:	Direct materials	77,300	b
Add:	Direct labor	25,300	c
Add:	Factory Overhead	15,180	d
	[60% x Direct labor cost]
	[60% x $25,300]
Less:	Inventory transferred out	115,500	e
	Ending Work in Process Inventory	13,580	f=a+b+c+d-e
Notes:	Ending work in process = Beginning WIP + Direct materials + Direct labor + Factory OH - Finished goods cost transferred out to other department
Please feel free to ask if anything about above solution in comment section of the question.