Question

The balance in the Work in Process Inventory at any point in time is equal to:

A. The costs for jobs finished during the period but not yet sold.
B. The cost of jobs ordered but not yet started into production.
C.. The sum of the costs for all jobs in process but not yet completed.
D. The costs of all jobs started during the period, completed or not.
E. The sum of the materials, labor and overhead costs paid during the period

Answer 1

The correct answer is C: the balance of Work in Process Inventory at any point in time is the sum of the costs for all jobs in process but not yet completed.

Step-by-step explanation:

The balance in the Work in Process Inventory at any point in time is the sum of the costs for all jobs in process but not yet completed. This means option C is correct. Work in Process Inventory includes the costs accumulated for all the goods that are in production but have not been finished, consisting of direct materials, direct labor, and factory overhead. As jobs or products move through the production process, the related cost of production increases the Work in Process account. When these jobs are completed, the costs are transferred out of Work in Process Inventory and into Finished Goods Inventory.

In this context, the cost of production for a given quantity of output is determined by adding together the costs of each input, such as materials and labor (where each input has an associated factor payment, like wages and salaries), required to produce that amount of output.