Smith Company reports the following information: Cost of goods manufactured $68,250 Direct materials used 27,000 Direct labor incurred 25,000 Work in process inventory, January 1 11,000 Factory overhead is 75% of the cost of direct labor. Work in process inventory on December 31 is

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Business

Salvatore Riggs

1 July, 04:47

Smith Company reports the following information: Cost of goods manufactured $68,250 Direct materials used 27,000 Direct labor incurred 25,000 Work in process inventory, January 1 11,000 Factory overhead is 75% of the cost of direct labor. Work in process inventory on December 31 is

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Answers (1)

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Jayce Roman · Answer 1

Ending Work in process = $13,500

Explanation:

Giving the following information:

Cost of goods manufactured $68,250

Direct materials used 27,000

Direct labor incurred 25,000

Work in process inventory, January 1 11,000

Factory overhead is 75% of the cost of direct labor.

cost of goods manufactured = beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

68,250 = 11,000 + 27,000 + 25,000 + (0.75*25,000) - Ending WIP

Ending WIP = 11,000 + 27,000 + 25,000 + 18,750 - 68,250

Ending WIP = 13,500