Farber Corporation uses a job-order costing system. The information below is fro

Question

Farber Corporation uses a job-order costing system. The information below is from the financial records of the company for last year: Total manufacturing costs $2,900,000 Cost of goods manufactured $2,784,000 Predetermined overhead rate 80% of direct labor cost Applied overhead was 30% of total manufacturing costs. The Work in Process inventory at January 1 was 75% of the Work in Process inventory at December 31. The Work in Process inventory at December 31 was:

$141,000

$348,000

$464,000

$116,000

Explanation / Answer

The Work in Process inventory at December 31 was:          464,000.00 Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Manufacturing costs + Beginning WIP = Ending WIP + Cost of Goods manufactured Let ending WIP be x Beginning WIP be .75x 2,900,000 + .75x = x + 2784,000 2,900,000 - 2,784,000 = x - .75x 116,000 = .25x x = 464,000

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