Question

Question number 1: Davy Company had a beginning work in process inventory balance of $32,000. During the year, $54,500 of direct materials was placed into production. Direct labor was $63,400, and indirect labor was $19,500. Manufacturing overhead is applied at 125% of direct labor costs. Actual manufacturing overhead was $86,500, and jobs costing $225,000 were completed during the year. What is the ending work in process inventory balance? a. $172,000 b. $ 11,400 c. $ 4,150 d. $ 79,250

Answer 1

Answer 1
Davy Company
Ending Work in process inventory	Amount $	Amount $
Beginning Work in process inventory		32,000.00
Materials placed in production	54,500.00
Direct Labor	63,400.00
Manufacturing Overhead applied	79,250.00		This is 125% of $ 63,400.
Total Manufacturing costs		197,150.00
Total cost of work in process		229,150.00
Less: Jobs completed during the year		225,000.00
Ending Work in process inventory		4,150.00
So answer is Option C.
Answer 2
Nadal Company
Calculation of Plant wide OH Rate	Amount $	Note
Estimated Overhead costs	400,000.00	A
Estimated Direct Labor Hours	250,000.00	B
Predetermined OH Rate	1.60	C=A/B
Overhead applied	Amount $
Actual Direct Labor Hours	232,000.00	D
Predetermined OH Rate	1.60	See C
Overhead applied	371,200.00	E=C*D