The work in process inventory at the end of November after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to:

Question

Quizplus · Accepted Answer

The calculation for the work in process inventory at the end of November is as follows:

Total cost of units in process:
Direct materials cost = $21,000
Direct labor cost = $18,900
Manufacturing overhead cost applied = $10,500
Total cost = $50,400

Units in process = 840 (800 + 40)

Cost per unit = Total cost / Units in process = $50,400 / 840 = $60

Underapplied/Overapplied manufacturing overhead:
Actual manufacturing overhead = $12,000
Applied manufacturing overhead = $10,500
Overapplied manufacturing overhead = $1,500

Adjustment of work in process inventory = Overapplied manufacturing overhead x Cost per unit = $1,500 * $60 = $90

Work in process inventory at the end of November = Cost of units in process + Adjustment for overapplied manufacturing overhead = $50,400 + $90 = $12,280

Therefore, the closest option is C.

The Work in Process Inventory at the End of November