Farber Corporation uses a job-order costing system.The information below is from the financial records of the company for last year: Applied overhead was 30% of total manufacturing costs.The Work in Process inventory at January 1 was 75% of the Work in Process inventory at December 31. The Work in Process inventory at December 31 was:

Question

Farber Corporation uses a job-order costing system.The information below is from the financial records of the company for last year:  Applied overhead was 30% of total manufacturing costs.The Work in Process inventory at January 1 was 75% of the Work in Process inventory at December 31. The Work in Process inventory at December 31 was:

Quizplus · Accepted Answer

Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory - Ending work in process inventory
$2, 425, 000 = $2, 500, 000 + (0.75 × Ending work in process inventory)- Ending work in process inventory
$2, 425, 000 = $2, 500, 000 - (0.25 × Ending work in process inventory)
0.25 × Ending work in process inventory = $75, 000
Ending work in process inventory = $75, 000 ÷ 0.25 = $300, 000

Farber Corporation Uses a Job-Order Costing System