At January 1, the Work in process Inventory account for Star Company showed a ba

Question

At January 1, the Work in process Inventory account for Star Company showed a balance of $20,680. During January, direct materials costing $58,300 were requested for production, $24,200 of the $96,400 total factory payroll was used to pay indirect labor, and indirect materials costing $30,500 were purchased and used. Star applies overhead at a rate of 125% of direct labor costs. Also, costs of $193,600 were transferred to the Finished Goods Inventory account during January. The January 31 balance in the Work in Process Inventory account would be

a. $27,150.
b. $47,830.
c. $22,280.
d. $1,600.

Explanation / Answer

Hi, I spent an hour trying to answer this and the only conclusion I came to is that none of the options are correct. It does not even state in the question that these were all the costs that happened up until Jan 31, and most of the data they provide has nothing to do with the Process Inventory account. It also contains a lot of open ended information. Example--"Star applies overhead at a rate of 125% of direct labor costs" The above statement is impossible to calculate as direct labor costs are not mentioned in this question, only indirect costs. Hopefully this helped, best of luck. :)

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