The balance in White Company's Work in Process inventory account was $15,000 on August 1 and $18,000 on August 31. The company incurred $30,000 in direct labor cost during August and requisitioned $25,000 in raw materials (all direct material). If the sum of the debits to the Manufacturing Overhead account total $28,000 for the month, and if the sum of the credits totaled $30,000, then:

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The total manufacturing costs for the month are $30,000 (direct labor) + $25,000 (direct materials) + $28,000 (manufacturing overhead) = $83,000. Since the beginning work in process inventory was $15,000 and the ending work in process inventory was $18,000, the cost of goods manufactured for the month is $83,000 - $15,000 + $18,000 = $86,000. Since the manufacturing overhead account had a credit balance of $2,000 at the end of the month, the manufacturing overhead was underapplied by $2,000. Therefore, the cost of goods sold for the month is $86,000 - $2,000 = $84,000. Since the beginning finished goods inventory was $0 and the ending finished goods inventory was $0, the finished goods account was debited for $84,000 during the month.

The Balance in White Company's Work in Process Inventory Account