On January 1,Jackson,Inc.'s Work-in-Process Inventory account showed a balance of $66,700.During the year,materials requisitioned for use in production amounted to $70,700,of which $67,600 represented direct materials.Factory wages for the period were $208,000 of which $186,200 were for direct labor.Manufacturing overhead is allocated on the basis of 60% of direct labor cost.Actual overhead was $116,160.Jobs costing $353,190 were completed during the year.The December 31 balance in Work-in-Process Inventory is ________.

Question

Quizplus · Accepted Answer

The formula for calculating the cost of goods manufactured is:

Beginning Work-in-Process Inventory + Total Manufacturing Costs - Ending Work-in-Process Inventory = Cost of Goods Manufactured

Using this formula, we can calculate the cost of goods manufactured for Jackson, Inc. as follows:

Beginning Work-in-Process Inventory = $66,700
Direct materials used = $67,600
Direct labor = $186,200
Manufacturing overhead = $186,200 x 60% = $111,720
Total manufacturing costs = $67,600 + $186,200 + $111,720 = $365,520
Cost of goods manufactured = $66,700 + $365,520 - Ending Work-in-Process Inventory
Ending Work-in-Process Inventory = $79,030

Therefore, the December 31 balance in Work-in-Process Inventory is $79,030. The correct answer is D.