18 At the beginning of the current year the Grant Companys w

18. At the beginning of the current year, the Grant Company’s work in process inventory account had a balance of $30,000.  During the year, $68,000 of direct materials were used in production, and $66,000 of direct labor costs were incurred.  Factory overhead for the year amounted to $90,000. Cost of goods manufactured is $230,000.  The balance in work in process inventory on December 31 is... (Please show your work)

a)$24,000

b) $44,000

c) $66,000

d) $36,000

Solution

Calculate Balance of ending work in process inventory :

Total manufacturing cost = Direct material+direct labour+factory overhead

= 68000+66000+90000

Total manufacturing cost = 224000

Ending work in process = Beginning work in process+Total manufacturing cost-cost of goods manufactured

= 30000+224000-230000

Ending work in process = 24000

so answer is a) $24000