Question

Kapanga Manufacturing Corporation uses a job-order costing system and started the month of October with a zero balance in its work in process and finished goods inventory accounts. During October, Kapanga worked on three jobs and incurred the following direct costs on those jobs: Job B18 Job B19 Job C11 Direct materials $ 12,000 $ 25,000 $ 18,000 Direct labor $ 8,000 $ 10,000 $ 5,000 Kapanga applies manufacturing overhead at a rate of 150% of direct labor cost. During October, Kapanga completed Jobs B18 and B19 and sold Job B19. What is Kapanga's work in process inventory balance at the end of October?

Answer 1

Answer:

$30,500

Explanation:

The computation of Kapanga's work in process inventory balance at the end of October is shown below:-

Variable Overheads = 150% × $5,000

= $75,000

So,

Work In Process = Direct Material + Direct Labor + Variable Overheads

= $ 18,000 + $ 5,000 + $ 7,500 = $ 30,5000

= $30,500

So, we have applied the above formula.