The accounts of Melissa Manufacturing showed the following balances at the beginning of December: $$\begin{array} { | l | r | }
\hline \text { Account } & \text { Debit } \
\hline \text { Raw Materials Inventory } & \$ 50,000 \
\hline \text { Work-in-Process Inventory } & 80,000 \
\hline \text { Finished Goods Inventory } & 30,000 \
\hline \text { Manufacturing Overhead } & 15,000 \
\hline
\end{array}$$ The following transactions took place during the month:
December 2: Issued direct materials $25,000 and indirect materials $4,000 to production.
December 15: Paid $6,000 and $3,000 toward factory's direct labor cost and indirect labor cost, respectively.
What should be the balance in the Work-in-Process Inventory account at the end of December?

Question

The accounts of Melissa Manufacturing showed the following balances at the beginning of December: $$\begin{array} { | l | r | } 
\hline \text { Account } & \text { Debit } \
\hline \text { Raw Materials Inventory } & \$ 50,000 \
\hline \text { Work-in-Process Inventory } & 80,000 \
\hline \text { Finished Goods Inventory } & 30,000 \
\hline \text { Manufacturing Overhead } & 15,000 \
\hline
\end{array}$$ The following transactions took place during the month:
December 2: Issued direct materials $25,000 and indirect materials $4,000 to production.
December 15: Paid $6,000 and $3,000 toward factory's direct labor cost and indirect labor cost, respectively.
What should be the balance in the Work-in-Process Inventory account at the end of December?

Quizplus · Accepted Answer

The correct answer is A because the Work-in-Process Inventory account is debited for the cost of direct materials, direct labor, and manufacturing overhead incurred during the month. The total cost incurred during the month is $25,000 + $6,000 + $3,000 = $34,000. The beginning balance of the Work-in-Process Inventory account is $80,000, so the ending balance is $80,000 + $34,000 = $114,000.

The Accounts of Melissa Manufacturing Showed the Following Balances at the Beginning