The following events took place at a manufacturing company for the current year: a. Purchased $95,900 in direct materials.
b. Incurred labor costs as follows:

1. direct, $56,900
2. indirect, $14,500.

c. Other manufacturing overhead was $107,900, excluding indirect labor.
d. Transferred 80% of the materials to the manufacturing assembly line.
e. Completed 65% of the Work-in-Process during the year.
f. Sold 85% of the completed goods.
g. There were no beginning inventories.

Required:
What is the value of the ending Work-in-Process Inventory?

The ending Work-in-Process Inventory is:

= $89,600.

Explanation:

a) Data and Calculations:

Purchases of direct materials =    $95,900

Materials used (80% of $95,900) $76,720

Direct labor incurred =                    56,900

Overhead costs:

Indirect labor incurred =   14,500

Other overhead costs    107,900 122,400

Total production costs              $256,020

Cost of goods completed =          166,413

Ending Work in Process =          $89,607

Cost of goods completed =                     $166,413

Cost of goods sold = 85% of $166,413 = $141,451

Ending Finished goods inventory =        $24,962

this business is a price setter.

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