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19 September, 07:03

Wasson Company reported the following year-end information: Beginning work in process inventory $ 35,000 Beginning raw materials inventory 18,000 Ending work in process inventory 38,000 Ending raw materials inventory 15,000 Raw materials purchased 560,000 Direct labor 210,000 Manufacturing overhead 120,000 How much is Wasson's total cost of work in process for the year?

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  1. 19 September, 10:38
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    cost of work in process = $890,000

    Explanation:

    Giving the following information:

    Beginning work in process inventory $ 35,000

    Beginning raw materials inventory 18,000

    Ending work in process inventory 38,000

    Ending raw materials inventory 15,000

    Raw materials purchased 560,000

    Direct labor 210,000

    Manufacturing overhead 120,000

    To calculate the total cost of work in process, we need to use the following formula:

    cost of work in process = beginning WIP + direct materials used + direct labor + allocated manufacturing overhead - Ending WIP

    Direct materials used = beginning inventory + purchases - ending inventory

    Direct materials used = 18,000 + 560,000 - 15,000 = 563,000

    cost of work in process = 35,000 + 563,000 + 210,000 + 120,000 - 38,000 = 890,000
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