The Donaldson Company uses a job-order costing system.The following data were recorded for July: Overhead is applied to jobs at the rate of 80% of direct materials cost.Jobs 475,477,and 478 were completed during July and transferred to finished goods.Jobs 475 and 478 have been delivered to the customer.Donaldson's Work in Process inventory balance on July 31 was:

Question

The Donaldson Company uses a job-order costing system.The following data were recorded for July:  Overhead is applied to jobs at the rate of 80% of direct materials cost.Jobs 475,477,and 478 were completed during July and transferred to finished goods.Jobs 475 and 478 have been delivered to the customer.Donaldson's Work in Process inventory balance on July 31 was:

Quizplus · Accepted Answer

To determine the balance in the Work in Process inventory on July 31, we need to calculate the total cost of the jobs that are still in process. 
Total direct materials cost = $10,800 + $5,500 + $2,500 = $18,800 
Total applied overhead = 80% of $18,800 = $15,040 
Total cost of jobs still in process = $18,800 + $15,040 = $33,840 
Since Jobs 475, 477, and 478 were completed and transferred to finished goods, we do not include their costs in the Work in Process inventory balance. 
Therefore, the correct answer is C) $3,160.

The Donaldson Company Uses a Job-Order Costing System