The financial records for the Lee Manufacturing Company have been destroyed in a fire.The following information has been obtained from a separate set of books maintained by the cost accountant.The cost accountant now asks for your assistance in computing the missing amounts. What is the value of the ending Work-in-Process inventory balance?

Question

The financial records for the Lee Manufacturing Company have been destroyed in a fire.The following information has been obtained from a separate set of books maintained by the cost accountant.The cost accountant now asks for your assistance in computing the missing amounts.  What is the value of the ending Work-in-Process inventory balance?

Quizplus · Accepted Answer

The ending work-in-process inventory balance can be computed using the formula: Beginning WIP + Total Manufacturing Costs - Cost of Goods Manufactured = Ending WIP. From the information provided, the beginning work-in-process inventory balance is $2,000, the total manufacturing costs are $13,500, and the cost of goods manufactured is $8,000 (the total of direct materials, direct labor, and factory overhead). Thus, the ending work-in-process inventory balance can be computed as follows: $2,000 + $13,500 - $8,000 = $7,500. Therefore, the correct answer is choice C.

The Financial Records for the Lee Manufacturing Company Have Been