A manufacturer incurred 20000 of direct material 10000 of di

A manufacturer incurred $20,000 of direct material, $10,000 of direct labor, and $15,000 of manufacturing overhead during 2016. Beginning work in process inventory was $8,000. If cost of goods manufactured was $47,000, what was the amount of the ending work in process inventory?

Solution

Total manufacturing cost=Direct material+direct labour+overhead

=(20000+10000+15000)=$45000

Cost of goods manufactured=beginning Inventory+total manufacturing cost- ending inventory

47000=8000+45000-ending Inventory

Hence

Ending Inventory=(8000+45000-47000)

=$6000.