What is the balance of the work in process on December 31. At the beginning of 2
ID: 2388856 • Letter: W
Question
What is the balance of the work in process on December 31.At the beginning of 2011, work in process included $7200 of direct materials, $11,000 of direct labor, and $8,000 of factory overhead.
$60,000 of material and $40,000 of labor was added during the year, along with $40,000 of factory overhead.
Material is added to the process in a lump sum at the beginning and labor is added evenly during the process.
The work in process inventory was 20% complete on January 1, 2011 and 40% complete on December 31, 2011.
8000 units were in process on January 1 and 40,000 units were added during the year.
5000 units were in ending work in the ending work in process inventory.
What is the balance of the work in process on December 31.
Explanation / Answer
PRODUCTION UNITS MATERIALS LABOUR &OVERHEAD Opening WIP 8000 _ _ 80% 6400 processed during period 35000 100% 35000 100% 35000 closing WIP 5000 100% 5000 40% 2000 TOTAL 48000 40000 43400 STATEMENT OF COST elements of cost cost incurred during year equivalent production cost per unit material 60000 40000 1.5 labour 40000 43400 0.92 overhead 40000 43400 0.92 bal. of work in progress on 31 december will be:- materials (5000*1.5) 7500 labour (2000*0.92)1840 overhead (2000*0.92)1840 total:- $11180 NOTE:-MATERIAL IS ADDED IN LUMP SUM IN THE BEGINNING SO OPENING AND CLOSING MATERIAL IS TAKEN AS 100% COMPLETE
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