Asked by Jallisa Jackson on Jul 12, 2024
Verified
Hardigree Corporation uses a job-order costing system. The following data relate to the just completed month's operations. The ending balance in the Work in Process account is closest to:
A) $110,000
B) $120,000
C) $100,000
D) $90,000
Work in Process Account
A financial account found in the ledgers of manufacturing companies where costs related to the production process that are not yet complete are recorded.
- Compute the concluding balances of Work in Process accounts.
Verified Answer
JH
Jeannie HeerleinJul 14, 2024
Final Answer :
C
Explanation :
The ending balance in the Work in Process account can be calculated as follows:
Beginning balance in WIP + Total manufacturing costs incurred during the period - Cost of goods completed and transferred out = Ending balance in WIP.
Beginning balance in WIP = $120,000
Total manufacturing costs incurred during the period = Direct materials used + Direct labor + Manufacturing overhead applied
= $310,000 + $180,000 + $210,000 = $700,000
Cost of goods completed and transferred out = $720,000
Therefore, Ending balance in WIP = $120,000 + $700,000 - $720,000 = $100,000.
Beginning balance in WIP + Total manufacturing costs incurred during the period - Cost of goods completed and transferred out = Ending balance in WIP.
Beginning balance in WIP = $120,000
Total manufacturing costs incurred during the period = Direct materials used + Direct labor + Manufacturing overhead applied
= $310,000 + $180,000 + $210,000 = $700,000
Cost of goods completed and transferred out = $720,000
Therefore, Ending balance in WIP = $120,000 + $700,000 - $720,000 = $100,000.
Learning Objectives
- Compute the concluding balances of Work in Process accounts.
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