At the beginning of the year,Swift,Inc.'s Work-in-Process Inventory account had a balance of $124,000.During the year,$250,000 of direct materials were used in production,and $72,000 of direct labor costs were incurred.Manufacturing overhead amounted to $832,000.The cost of goods manufactured was $676,000.What is the balance in the Work-in-Process Inventory account on December 31?
A) $1,154,000
B) $1,352,000
C) $676,000
D) $602,000

Question

Quizplus · Accepted Answer

The balance in the Work-in-Process Inventory account on December 31 can be calculated using the formula:

Beginning balance + Cost of goods manufactured - Cost of goods completed

The cost of goods completed can be calculated as:

Direct materials used + Direct labor costs + Manufacturing overhead

Direct materials used = $250,000
Direct labor costs = $72,000
Manufacturing overhead = $832,000

Cost of goods completed = $250,000 + $72,000 + $832,000 = $1,154,000

Therefore, the balance in the Work-in-Process Inventory account on December 31 would be:

Beginning balance + Cost of goods manufactured - Cost of goods completed
= $124,000 + $676,000 - $1,154,000
= $602,000

Hence, the correct answer is option D.

At the Beginning of the Year,Swift,Inc