The accounts of Melissa Manufacturing showed the following balances at the beginning of December: $$\begin{array} { | l | r | }
\hline \text { Account } & \text { Debit } \
\hline \text { Raw Materials Inventory } & \$ 55,000 \
\hline \text { Work-in-Process Inventory } & 81,000 \
\hline \text { Finished Goods Inventory } & 38,000 \
\hline \text { Manufacturing Overhead } & 17,000 \
\hline
\end{array}$$ The following transactions took place during the month:
December 2: Issued direct materials $37,000 and indirect materials $4,000 to production.
December 15: Incurred $6,000 and $5,000 toward factory's direct labor cost and indirect labor cost,respectively.
What should be the balance in the Work-in-Process Inventory following these transactions?

Question

The accounts of Melissa Manufacturing showed the following balances at the beginning of December: $$\begin{array} { | l | r | } 
\hline \text { Account } & \text { Debit } \
\hline \text { Raw Materials Inventory } & \$ 55,000 \
\hline \text { Work-in-Process Inventory } & 81,000 \
\hline \text { Finished Goods Inventory } & 38,000 \
\hline \text { Manufacturing Overhead } & 17,000 \
\hline
\end{array}$$ The following transactions took place during the month:
December 2: Issued direct materials $37,000 and indirect materials $4,000 to production.
December 15: Incurred $6,000 and $5,000 toward factory's direct labor cost and indirect labor cost,respectively.
What should be the balance in the Work-in-Process Inventory following these transactions?

Quizplus · Accepted Answer

The correct answer is A because the balance in the Work-in-Process Inventory following these transactions is $124,000. This is calculated by adding the beginning balance of $81,000 to the direct materials issued of $37,000, the direct labor cost of $6,000, and the indirect labor cost of $5,000, and then subtracting the indirect materials issued of $4,000.

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