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

Question

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

Quizplus · Accepted Answer

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.

Hardigree Corporation Uses a Job-Order Costing System