On July 1, Tin Hau Company\'s Work in Process Inventory account showed beginning

Question

On July 1, Tin Hau Company's Work in Process Inventory account showed beginning balance of S9,000. The Materials Inventory account showed a beg^* balance of $40,000. Production activity for July was as follows: Direct materials costing $28,800 were requested for production; total production-related payroll was $10,600, of which $2,600 was used to pay for indirect labor; indirect materials costing $8,400 were purchased and used; and overhead was applied at a rate of 120 percent of direct labor costs. Record Tin Hau's materials, labor, and overhead costs for July in T accounts. Compute the ending balance in the Work in Process Inventory account. Assume a transfer of $45,000 to the Finished Goods Inventory account during the period.

Explanation / Answer

1)
work in process inventory (db) $28,800
direct material (Cr) $28,800

work in process inventory (db) $8,000
payroll (Cr) 8,000

work in process inventory (db) 1.2*8000=$9,600
Over head cost (cr) $9,600

work in process inventory (db) $8,400
indirect material (cr) $8400

work in process inventory (db) $2600
Indirect labour (cr) $2600

2) endin balance= begining work in process+added druring month-transfered to finished goods

=9000+(9000+28800+8000+9600+8400+2600)-45000
=$30,400

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