39 of 55 (0 complete) ?? 1 This Test: 150 pts possible his Question: 2 pts At th

ID: 2404097 • Letter: 3

Question

39 of 55 (0 complete) ?? 1 This Test: 150 pts possible his Question: 2 pts At the beginning of the year, Swift, Inc.'s Work- in - Process Inventory account had a balance of $124,000. During the year, $250,000 of direct materials were used in production, and $72,000 of direct labor costs were incurred. Manufacturing overhead amounted to $832,000. The cost of goods manufactured was $676,000. What is the balance in the Work- in - Process Inventory account on December 31? O A. $1,352,000 O B. $602,000 OC. $676,000 OD. $1,154,000

Explanation / Answer

Correct Answer (B)$602000

Calculations

Calculation of Closing WIP

Material Cost

$ 250,000.00

Direct Labor

$ 72,000.00

Manufacturing Overheads

$ 832,000.00

Total Manufacturing cost

$ 1,154,000.00

Add: Opening WIP

$ 124,000.00

$ 1,278,000.00

Less: COGM

$ 676,000.00

Closing WIP (Balancing Figure)

$ 602,000.00

COGM is Calculated by Adding Opening WIP and deducting Closing WIP from Total Manufacturing cost.