The Work in Process Inventory Account Had a Beginning Balance

question 22

Multiple Choice

The Work in Process Inventory account had a beginning balance of $4,200 on February 1. During February, the cost of direct materials used was $29,000 and direct labor cost applied to production was $3,000. Overhead is applied at the rate of $20 per direct labor hour. During February, 180 direct labor hours were used in the production process. If the cost of finished goods manufactured was $34,100, compute the balance in the Work in Process Inventory account at the end of February.

• A) $9,900.
• B) $1,500.
• C) $2,100.
• D) $5,700.

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Definitions:

Variable Costs

Costs that vary directly with the level of production or service delivery, such as materials, labor, and utilities.

Internal Rate Of Return

A financial metric used to evaluate the profitability of investments, representing the interest rate at which the net present value of costs and benefits of a project break even.

Salvage Value

The anticipated salvage value of an asset at the termination of its service life.

Annual Cash Flows

The total amount of money being transferred into and out of a business, especially affecting liquidity, within a year.