The Fabricating Department started the current month with a beginning Work in Process inventory of $10,000. During the month, it was assigned the following costs: direct materials, $76,000; direct labor, $24,000; and factory overhead, 50% of direct labor cost. Also, inventory with a cost of $109,000 was transferred out of the department to the next phase in the process. The ending balance of the Work in Process Inventory account for the Fabricating Department is:
A) $110,000.
B) $13,000.
C) $56,000.
D) $59,000.
E) $165,000.

Question

Quizplus · Accepted Answer

The ending balance of Work in Process Inventory is calculated as: Beginning WIP ($10,000) + Direct Materials ($76,000) + Direct Labor ($24,000) + Factory Overhead (50% of $24,000 = $12,000) - Transferred Out ($109,000) = $13,000.

The Fabricating Department Started the Current Month with a Beginning