Figure 5 - 4
Lanyard Company uses a job-order costing system to account for product costs. The following information pertains to 2016:
Factory overhead rate is $18 per direct labor hour.
-Refer to Figure 5-4. What is the total amount credited to Materials Inventory for Lanyard in 2016?
A) $480,000
B) $170,000
C) $140,000
D) $110,000

Question

Figure 5 - 4
Lanyard Company uses a job-order costing system to account for product costs. The following information pertains to 2016:
  Factory overhead rate is $18 per direct labor hour.
-Refer to Figure 5-4. What is the total amount credited to Materials Inventory for Lanyard in 2016?
A) $480,000 
B) $170,000 
C) $140,000 
D) $110,000

Quizplus · Accepted Answer

The total amount credited to Materials Inventory can be calculated using the formula:

Beginning balance + purchases - ending balance = amount credited

The information given in Figure 5-4 shows that the beginning balance of Materials Inventory was $60,000 and the ending balance was $20,000. Therefore:

$60,000 + $100,000 - $20,000 = $140,000

This means that $140,000 was credited to Materials Inventory for Lanyard in 2016.