Question

The filtering department started the current month with beginning goods in process inventory of $55,000. During the month, it was assigned the following costs: Direct Materials $77,000; Direct Labor $44,000; and Factory Overhead, 20% of direct material cost. Also, inventory with a cost of $66,000 was transferred out of the dept. to the next phase in the process the ending balance of the goods in process inventory account for the filtering department is:

Answer 1

To calculate the ending balance of the goods in process inventory for the filtering department, add the direct materials cost, direct labor cost, and factory overhead cost. Subtract the cost of transferred out inventory to get the ending balance.

Step-by-step explanation:

To calculate the ending balance of the goods in process inventory for the filtering department, we need to subtract the cost of transferred out inventory from the total assigned costs. Let's calculate it step by step:

1. Calculate the total cost assigned to the filtering department by adding the direct materials cost, direct labor cost, and factory overhead cost. The factory overhead cost is 20% of the direct material cost, so we can calculate it as 20% of $77,000.
2. Subtract the cost of transferred out inventory ($66,000) from the total assigned costs to get the ending balance of the goods in process inventory.

Let's calculate it:

1. Total cost assigned = Direct Materials + Direct Labor + Factory Overhead
2. = $77,000 + $44,000 + ($77,000 * 20%)
3. = $77,000 + $44,000 + $15,400
4. = $136,400
5. Ending balance of goods in process inventory = Total assigned costs - Cost of transferred out inventory
6. = $136,400 - $66,000
7. = $70,400

Therefore, the ending balance of the goods in process inventory for the filtering department is $70,400.