The Following Account Balances at the Beginning of January Were

question 210

Multiple Choice

The following account balances at the beginning of January were selected from the general ledger of Ocean City Manufacturing Company: Additional data:1) Actual manufacturing overhead for January amounted to $62,000.
2) Total direct labor cost for January was $63,000.
3) The predetermined manufacturing overhead rate is based on direct labor cost. The budget for the year called for $250,000 of direct labor cost and $350,000 of manufacturing overhead costs.
4) The only job unfinished on January 31 was Job No. 151, for which total direct labor charges were $5,200 (800 direct labor hours) and total direct material charges were $14,000.
5) Cost of direct materials placed in production during January totaled $123,000. There were no indirect material requisitions during January.
6) January 31 balance in raw materials inventory was $35,000.
"7) Finished goods inventory balance on January 31 was $34,500.
What is the work in process inventory balance on January 31?"

• A)$ 7,280
• B)$ 22,914
• C)$ 26,480
• D)$ 50,914

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Definitions:

Managerial Decision Making

The process by which managers and leaders of an organization make choices and strategies to achieve organizational goals.

Relevant Range

The range of activity over which changes in cost are of interest to management.

Cost Behavior

Cost behavior refers to how different types of production costs change when there is a change in the level of production activity.

Relevant Range

The range of activity within which the assumptions about variable and fixed cost behavior hold true for a given business.