At the beginning of 2017,Conway Manufacturing had the following account balances:
$$\begin{array} { | l | l | }
\hline \begin{array} { l }
\text { Work in } \
\text { process } \
\text { inventory }
\end{array} & \quad \quad \quad \quad\
\hline 2700 & \
\hline
\end{array}$$
$$\begin{array} { | l | l | }
\hline \begin{array} { l }
\text { Finished } \
\text { goods }
\end{array} & \quad \quad \quad \quad\
\text { inventory } & \
\hline 8700 & \
\hline
\end{array}$$
$\begin{array}{|l|l|}
\hline\begin{array}{l}
\text { Manufacturin }&\quad \
\text { g overhead }&
\end{array} \
\hline 0&\quad\quad\quad\quad\
\hline
\end{array}$

$\begin{array}{|r|r|}
\hline\text { Cost of sales } & \
\hline 0 &\quad\quad\quad\quad \
\hline
\end{array}$
$\begin{array}{|r|r|}
\hline\text { Sales revenue } & \
\hline &0\quad\quad\quad\quad \
\hline
\end{array}$
Following additional details are provided for the year:
$$\begin{array} { | l | l | }
\hline \text { Direct materials placed in production } & \$ 89,000 \
\hline \text { Direct labour incurred } & 190,000 \
\hline \text { Manufacturing overhead incurred } & 301,000 \
\hline \text { Manufacturing overhead allocated to } & \
\text { production } & 305,000 \
\hline \text { Cost of jobs completed transferred } & 500,000 \
\hline
\end{array}$$
The ending balance in the Work in process inventory account is a:

Question

At the beginning of 2017,Conway Manufacturing had the following account balances:
$$\begin{array} { | l | l | } 
\hline \begin{array} { l } 
\text { Work in } \
\text { process } \
\text { inventory }
\end{array} & \quad \quad \quad \quad\
\hline 2700 & \
\hline
\end{array}$$
$$\begin{array} { | l | l | } 
\hline \begin{array} { l } 
\text { Finished } \
\text { goods }
\end{array} &  \quad \quad \quad \quad\
\text { inventory } & \
\hline 8700 & \
\hline
\end{array}$$
$\begin{array}{|l|l|}
\hline\begin{array}{l}
\text { Manufacturin }&\quad \
\text { g overhead }&
\end{array} \
\hline 0&\quad\quad\quad\quad\
\hline
\end{array}$

$\begin{array}{|r|r|}
\hline\text { Cost of sales } & \
\hline 0 &\quad\quad\quad\quad \
\hline
\end{array}$
$\begin{array}{|r|r|}
\hline\text { Sales revenue } & \ 
\hline  &0\quad\quad\quad\quad \
\hline
\end{array}$
Following additional details are provided for the year:
$$\begin{array} { | l | l | } 
\hline \text { Direct materials placed in production } & \$ 89,000 \
\hline \text { Direct labour incurred } & 190,000 \
\hline \text { Manufacturing overhead incurred } & 301,000 \
\hline \text { Manufacturing overhead allocated to } & \
\text { production } & 305,000 \
\hline \text { Cost of jobs completed transferred } & 500,000 \
\hline
\end{array}$$
The ending balance in the Work in process inventory account is a:

Quizplus · Accepted Answer

To find the ending balance in the Work in process inventory account, we need to determine the change in balance during the year.
Beginning balance = $79,200 (given)
Direct materials used = $268,500 - $19,800 (given) + $12,100 (given) = $260,800
Direct labor = $282,400 (given)
Manufacturing overhead = $358,800 (given)
Total manufacturing costs = $901,000
Cost of goods manufactured = $864,000 (given)
Therefore, the change in Work in process inventory balance = Cost of goods manufactured - Beginning Work in process inventory balance
= $864,000 - $79,200 = $784,800
Since the Work in process inventory account is a balance sheet account, we need to determine if it has a debit or credit balance. When total manufacturing costs (which include direct materials used, direct labor, and manufacturing overhead) exceed cost of goods manufactured, the difference is added to Work in process inventory, resulting in a debit balance. Conversely, when cost of goods manufactured exceed total manufacturing costs, the difference is subtracted from Work in process inventory, resulting in a credit balance.
In this case, since cost of goods manufactured ($864,000) exceeds total manufacturing costs ($901,000), the difference ($37,000) is subtracted from the Work in process inventory beginning balance ($79,200), resulting in a debit ending balance of $86,700. Therefore, the correct answer is C.

At the Beginning of 2017,Conway Manufacturing Had the Following Account