The following information is from the finanial records of Co

The following information is from the finanial records of Company ExCost for the year:
Total Manufacturing Costs	$           2,150,000
Cost of Goods Manufactured	$           2,075,000
Applied Factory Overhead was	25% of total manufacturing costs
Factory Overhead was applied at a rate of	80% of direct labor costs
Work-in-Process Inventory on January 1 was	75% of Work-in-Process Inventory on Dec 31
What is the carrying value of Work-in-Process Inventories on December 31:
What is the total Direct Material Costs for the Year:

Solution

1) total manufacturing cost + beginning WIP -ending WIP = cost of goods manufactured lets assume that the ending WIP is X 2,150,000 + .75x -x          = 2,075,000 .25x                                      = 2,150,000-2,075,000 x                                  = 300000 thus the carrying value of work in process inventory on december 31 is $300,000 2) total manufacturing cost = direct materials + direct labor + overhead applied Applied overhead = 2,150,000*25% 537500 Applied overhead is applied at the rate of 80% of direct labor cost hence direct labor cost = 537500/80% 671875 direct materials = 2,150,000-537,500-671,875 940625 Answer