Deco Corporation uses a job costing system. On January? 1, Deco corporations wor

Question

Deco Corporation uses a job costing system. On January? 1, Deco corporations work in process inventory account had a balance of $ 75100. During the? year, materials requisitioned for use in production amounted to $ 120800?, of which $ 82400 represented direct materials. Factory wages for the period were $ 231100?, of which $ 219100 were for direct labor. Manufacturing overhead is allocated on the basis of 85?% of direct labor cost. Actual overhead cost for the year was $ 125000. Jobs costing $ 336400 were completed during the year.

A.$156000

B. $226435

C. $427000

D. $177780

Explanation / Answer

B. $226,435

The December 31 work in process inventory balance is:

= $75,100 + 82,400 + 219,100 + (85 % × 219,100 ) - 336,400

= $226,435

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