Question

# The Lee Corporation uses a job-order costing system. The following data were recorded for June: June...

The Lee Corporation uses a job-order costing system. The following data were recorded for June:

 June 1 Added During June Job Number Work in Process Inventory Direct Materials Direct Labor 235 \$2,600 \$640 \$430 236 \$1,600 \$860 \$1,070 237 \$1,090 \$1,280 \$1,870 238 \$850 \$1,640 \$2,410

Overhead is charged to production at 65% of direct materials cost. Jobs 235, 237, and 238 were completed during June and transferred to finished goods. Jobs 235 and 238 have been delivered to customers. Actual manufacturing overhead was equal to manufacturing overhead applied. There were no Finished Goods inventories at the beginning of June.

Lee's Work in Process inventory balance on June 30 was:

rev: 10_24_2017_QC_CS-103206

A) \$4,089

B) \$4,249

C) \$9,599

D) \$3,530

Ans- Computing the balance work in Process inventory balance on June 30:

Job: 236

 Particulars Amount (\$) Beginning work in process inventory 1,600 Add: Direct material 860 Direct labor 1,070 Overhead (\$860*65%) 559 Ending work in process inventory \$4,089

Hence, the work in process inventory on 30th June is \$4,089, Therefore the correct option is A-\$4,089

Note-

The completed jobs will not form part of the closing work in process inventory. Therefore only Job no.236 forms part of the ending work in process inventory.

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