Wavy Company had a beginning work in process inventory balance of $ 32 comma 100. During the year, $ 54 comma 500 of direct materials was placed into production. Direct labor was $ 63 comma 400 , and indirect labor was $ 19 comma 900. Manufacturing overhead is allocated at 125 % of direct labor costs. Actual manufacturing overhead was $ 87 comma 500 , and jobs costing $ 225 comma 600 were completed during the year. What is the ending work in process inventory balance?

Question

Lilly

Business

15 March, 05:26

Wavy Company had a beginning work in process inventory balance of $ 32 comma 100. During the year, $ 54 comma 500 of direct materials was placed into production. Direct labor was $ 63 comma 400 , and indirect labor was $ 19 comma 900. Manufacturing overhead is allocated at 125 % of direct labor costs. Actual manufacturing overhead was $ 87 comma 500 , and jobs costing $ 225 comma 600 were completed during the year. What is the ending work in process inventory balance?

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Answers (1)

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Clarissa Johnson · Answer 1

Ending inventory = $3,650

Explanation:

It is given that manufacturing overhead is 125% of direct labour cost.

Manufacturing overhead = 1.25 * 63,400 = $79,250

Ending work in process inventory = Manufacturing Overhead + opening process inventory + Direct materials inputted + Direct labour - Jobs costing

Ending work inventory = 79,250 + 32,100 + 54,500 + 63,400 - 225,600

Ending inventory = $3,650