Kapanga Manufacturing Corporation uses a job-order costing system and started the month of October with a zero balance in its work in process and finished goods inventory accounts. During October, Kapanga worked on three jobs and incurred the following direct costs on those jobs: Job B18: Direct materials ($12,000) Direct labor ($8,000)

Job B19: Direct materials ($25,000) Direct labor: ($10,000)

Job C11: Direct materials ($18,000) Direct labor: ($5,000)

Kapanga applies manufacturing overhead at a rate of 150% of direct labor cost. During October, Kapanga completed Jobs B18 and B19 and sold Job B19.

What is Kapanga's work in process inventory balance at the end of October?
A) $23,000
B) $30,500
C) $32,000
D) $43,000

B) $30,500

Explanation:

Calculation for Kapanga's work in process inventory balance at the end of October

First step is to calculate the Variable Overheads

Variable Overheads = 150% × $5,000

Variable Overheads = $75,000

Now let calculate work in process inventory balance using this formula

Work in process inventory balance = Direct Material + Direct Labor + Variable Overheads

Let plug in the formula

Work in process inventory balance= $ 18,000 + $ 5,000 + $ 7,500 = $ 30,5000

Work in process inventory balance= $30,500

Therefore Kapanga's work in process inventory balance at the end of October will be $30,500

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