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

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Answer #1

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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