Question

Selected accounts with amounts omitted are as follows Work in Process Aug. 1 Balance 275,000 Aug. 31 Goods finished 1,030,000 31 Direct materials X 31 Direct labor 450,000 31 Factory overhead X Factory Overhead Aug. 1–31 Costs incurred 145,000 Aug. 1 Balance 15,000 31 Applied (30% of direct labor cost) X If the balance of Work in Process on August 31 is $220,000, what was the amount debited to Work in Process for direct materials in August? a. $170,000 b. $580,000 c. $390,000 d. $525,000

Answer 1

The amount debited to Work in Process for direct materials in August is $-900,000.

Step-by-step explanation:

The amount debited to Work in Process for direct materials in August can be calculated by adjusting the balance of Work in Process on August 1 and accounting for the goods finished and costs incurred during the month.

Given that the balance of Work in Process on August 31 is $220,000, we can calculate the direct materials by subtracting the goods finished ($1,030,000) and costs incurred ($145,000) from the balance on August 1 ($275,000).

The calculation is: Direct materials = Balance on August 1 - Goods finished - Costs incurred = $275,000 - $1,030,000 - $145,000 = $-900,000.

Therefore, the amount debited to Work in Process for direct materials in August is $-900,000.

Answer 2

c. $390,000

Step-by-step explanation:

WIP Beg 275,000

DM X

DL 450,000

FO 135,000 (30% of labor cost)

Cost added during the period 975,000

-FG 1,030,000

WIP ending 220,000

`$$Beginning WIP + added = Ending WIP+ COGM`

275,000 + added = 220,000 + 1,030,000

added = 220,000 + 1,030,000 - 275,000 = 975,000

cost added during the period:

DM + DL + FO

DM + 450,000 + 135,000 = 975,000

DM = 975,000 - 450,000 - 135,000 = 390,000