Mendez Inc.had the following information for the preceding year: Additional information for the year is as follows:
What was the beginning Work in Process Inventory balance on 1/1?

Question

Mendez Inc.had the following information for the preceding year:  Additional information for the year is as follows:
 What was the beginning Work in Process Inventory balance on 1/1?

Quizplus · Accepted Answer

The beginning Work in Process Inventory balance on 1/1 can be calculated by subtracting the cost of goods manufactured from the total cost of work in process for the year. Using the information given, we can calculate the cost of goods manufactured as $720,000. We can also calculate the total cost of work in process as the sum of the beginning WIP inventory, direct materials used, direct labor, and factory overhead applied, which is $770,000 ($50,000 + $400,000 + $250,000 + $70,000). Therefore, the beginning WIP inventory balance on 1/1 was $50,000 (i.e. $770,000 - $720,000).