Question

Taylored T’s is a sole proprietorship owned and operated by Taylor Breckitt. TT’s takes plain t-shirts and prints or sews logos and designs for customers. Taylor is required to file financial statements with his bank each month in order to keep their credit line open. TT’s reported the following results for March:

Beginning Raw Materials Inventory	$500
Ending Raw Materials Inventory:	$750
Beginning Work in Process Inventory:	$3,200
Beginning Finished Goods Inventory:	$2,500
Ending Finished Goods Inventory:	$2,200
Cost of Goods Sold:	$42,500
Materials Purchased:	$49,000
Indirect Materials Used:	$9,000
Direct Labor Wages:	$50,000
Indirect Labor Wages:	$6,100
Production Equipment Depreciation:	$2,600
Equipment Maintenance:	$1,800
Factory Rent:	$5,400
Office Supplies Used:	$1,250
Selling and Administrative Expenses:	$11,100

The bank is especially concerned about the Working Capital ratio, so they want to be sure that TT is reporting their assets fairly.

What was TT’s Ending Work in Process Inventory for the period?

Select one or more:

a. $38,880

b. $154,850

c. $94,205

d. $75,650

Answer 1

Correct answer----------(d) $75,650

Working

Cost of Goods Manufactured and Cost of goods sold
Beginning Work in process			$            3,200.00
Direct materials used
Raw material Inventory Beginning	$                 500.00
Raw material Purchased (49000-9000)	$           40,000.00
Raw material available for use	$           40,500.00
Less: Raw material Inventory Ending	$                 750.00
Direct Material Used		$        39,750.00
Direct labor		$        50,000.00
Manufacturing Overheads		$        24,900.00
Total manufacturing cost incurred during the year			$       114,650.00
Total manufacturing cost to account for			$       117,850.00
Less: Ending WIP inventory (Balancing figure)			$          75,650.00
Cost of goods manufactured			$          42,200.00
Add: Beginning Finished goods inventory			$            2,500.00
Goods available for sale			$          44,700.00
Less: Ending Finished goods inventory			$            2,200.00
Cost of goods sold			$          42,500.00