Question

Madtack Company uses a job-order costing system and started the month
of March with only one job in process (Job #359). This job had $5,000
of total cost assigned to it at the beginning of March. Madtack applies
overhead to jobs at a rate of 175% of direct labor cost. During March,
Madtack assigned production costs as follows to the jobs worked on
during the month:

                             Job #359      Job #360      Job #361
direct materials ..........   $1,000         $5,000       $3,000
direct labor ..............    2,000          3,000        2,000

During March, Madtack completed and sold Job #360. Job #361 was also
completed but was not sold by the end of March. Job #359 was not
completed by the end of March. Madtack Company had total actual
overhead cost of $10,700 for the month of March. 

Calculate the amount of work in process inventory reported in Madtack
Company's March 31 balance sheet.

Answer 1

Correct answer------------$11,500

Working

	Work in process
	Job 359
Beginning cost	$   5,000.00
Cost added during month
Direct material	$   1,000.00
Direct labor	$   2,000.00
Overhead applied	$   3,500.00
Total cost of work in process at the end of March 31	$ 11,500.00

Job 361 is under finished goods and Job 360 is under cost of goods sold. Only incomplete jobs remain under work in process account.