16 Work in process inventory on December 31 of the current y

16) Work in process inventory on December 31 of the current year is $44,000. Work in process inventory increased by 60% during the year. Cost of goods manufactured amounts to $275,000. What are the total manufacturing costs incurred in the current year? Please show your work.

a) $291,500

b) $302,000

c) $275,750

d) $233,750

Solution

Beginning WIP=($44000/1.6)=$27500

Hence Cost of goods manufactured=Beginning WIP+total manufacturing costs incurred-Ending WIP

Hence

275000=27500+total manufacturing costs incurred-44000

Hence

total manufacturing costs incurred=(275000+44000-27500)

which is equal to

=$291500.