Question

Basil Industries reported the following information for December:

Beginning balance, Raw Materials Inventory	$187,500
Beginning balance, Work in process Inventory	300,000
Beginning balance, Finished Goods Inventory	106,250
Purchases of raw materials	337,500
Factory electricity	62,500
Direct labor payroll	200,000
Depreciation on factory equipment	218,750
Insurance on factory building	50,000
Indirect materials used in production	43,750
Total raw materials used in production	406,250
Indirect labor payroll	150,000
Cost of goods manufactured	1,250,000
Cost of goods sold	1,312,500

What was the ending balance in Basil’s Work in Process Inventory account?

$75,000

$137,500

$262,500

$181,250

Answer 1

Total raw materials used in production	406250
(-) Indirect materials used in production	43750
Direct materials used in production		362500
Direct labor payroll		200000
Factory overheads :
Factory electricity	62500
Depreciation on factory equipment	218750
Insurance on factory building	50000
Indirect materials used in production	43750
Indirect labor payroll	150000
Total factory overheads		525000
Total manufacturing cost		1087500

Beginning balance, Work in process Inventory	300000
(+) Total manufacturing cost	1087500
(-) Cost of goods manufactured	1250000
Ending balance, Work in process Inventory	137500