Basil Industries reported the following information for December: What was the ending balance in Basil's Work in Process Inventory account?

Question

Basil Industries reported the following information for December:  What was the ending balance in Basil's Work in Process Inventory account?

Quizplus · Accepted Answer

The ending balance in Work in Process Inventory can be found by adding together the direct materials, direct labor, and manufacturing overhead costs incurred for the month, and then subtracting the cost of goods manufactured. Using the information provided, we get: Direct materials: $25,000 Direct labor: $50,000 Manufacturing overhead: $37,500 Total manufacturing costs: $112,500 Cost of goods manufactured: $25,000 + $87,500 - $50,000 = $62,500 Ending balance in Work in Process Inventory: $112,500 - $62,500 = $<<112500-62500=50000>>50,000. Therefore, option B is the correct answer.

Basil Industries Reported the Following Information for December: What