Question

The following account balances at the beginning of January were selected from the general ledger of Fresh Bagel Manufacturing Company:

Work in process inventory	$0
Raw materials inventory	$28,800
Finished goods inventory	$40,200

Additional data:
1. Actual manufacturing overhead for January amounted to $66,100.
2. Total direct labor cost for January was $64,000.
3. The predetermined manufacturing overhead rate is based on direct labor cost. The budget for the year called for $248,000 of direct labor cost and $322,400 of manufacturing overhead costs.
4. The only job unfinished on January 31 was Job No. 151, for which total direct labor charges were $5600 (1600 direct labor hours) and total direct material charges were $14,400.
5. Cost of direct materials placed in production during January totaled $124,000. There were no indirect material requisitions during January.
6. January 31 balance in raw materials inventory was $35,400.
7. Finished goods inventory balance on January 31 was $35,200.

What is the work in process inventory balance on January 31?

Answer 1

Work in process inventory balance will be the cost of unfinished job

Here,the unfinished job is Job No.151

Cost of Job No.151:

$

Direct material

14400

Direct labor

5600

Manufacturing overhead applied

(Note:1)

7280

Total cost

27280

Work in process inventory balance=$27280

Note:1-Manufacturing overhead applied -

Predetermined overhead rate=Estimated manufacturing overhead/Estimated direct labor cost=322400/248000=$ 1.3 per direct labor cost

Manufacturing overhead applied=Predetermined overhead*direct labor cost of Job No.151=1.3*5600=$ 7280