On June 1, 2012, Dalton Production Company had beginning balances as shown in the T-accounts below. During June, the following transactions took place:
June 2: Issue $2,400 of direct materials and $200 of indirect materials to production.
Following this transaction, what was the balance in the Work in process inventory account?

Question

On June 1, 2012, Dalton Production Company had beginning balances as shown in the T-accounts below.  During June, the following transactions took place:
June 2: Issue $2,400 of direct materials and $200 of indirect materials to production.
Following this transaction, what was the balance in the Work in process inventory account?

Quizplus · Accepted Answer

The Work in process inventory account will increase by the amount of direct materials used in production, which is $2,400. The indirect materials are not included in the WIP inventory. Therefore, the new balance in the WIP inventory account will be $22,400 ($20,000 beginning balance + $2,400 direct materials issued to production).

On June 1, 2012, Dalton Production Company Had Beginning Balances