On January 1, 2015, Jackson Company's Work-in-Process Inventory account showed a balance of $65,000. During 2015, materials requisitioned for use in production amounted to $70,000 of which $66,000 represented direct materials. Factory wages for the period were $209,000 of which $186,400 were for direct labor. Manufacturing overhead is allocated on the basis of 60% of direct labor cost. Actual overhead was $116,440. Jobs costing $353,240 were completed during 2015. The December 31, 2015, balance in Work-in-Process Inventory is:

Question

Quizplus · Accepted Answer

To find the balance of work-in-process inventory at December 31, 2015, we need to consider the following:

1. Beginning balance of work-in-process inventory: $65,000
2. Direct materials used: $66,000
3. Direct labor cost: $186,400
4. Manufacturing overhead allocated: 60% x $186,400 = $111,840
5. Actual manufacturing overhead: $116,440
6. Total manufacturing costs: $66,000 + $186,400 + $111,840 = $364,240
7. Cost of goods completed: $353,240
8. Ending balance of work-in-process inventory: ?

Using the equation:

Beginning balance + Total manufacturing costs - Cost of goods completed = Ending balance

$65,000 + $364,240 - $353,240 = $76,000

Therefore, the balance in Work-in-Process Inventory at December 31, 2015, is $76,000, which is option D.

On January 1, 2015, Jackson Company's Work-In-Process Inventory Account Showed