Use the following information for questions 7-8 following data from the just com

Question

Use the following information for questions 7-8 following data from the just complcted year are taken from the accounting records of Mason Company. Please use the information below Sales Direct Labor Cost Raw Materials Purchased Selling Expense Administrative Expense Manufacturing Overhead Applied to Work in $524,000 $70,000 $118,000 $140,000 563,000 Process $90,000 Actual Manufacturing Overhead Cost $80,000 End of Year Beginning of Inventories Raw Materials Work in Process Finished Goods Year $7,000$15,000 $5,000 $20,000 Additional information: For the year, the cost of goods manufactured totaled $275,000; the unadjusted cost of goods sold totaled $260,000. The company's overapplied or underapplied overhead is closed entirely to Cost of Goods Sold 7. How much was the Company's Work in Process inventory balance at the beginning of the year? A. $2,000 B. $10,000 C. $15,000 D. $20,000 E. None of the above

Explanation / Answer

Mason Company Schedule of Cost of Goods Manufactured Direct materials: Beginning raw materials inventory $7,000 given Add: Purchases of raw materials 118,000 given Raw materials available for use 125,000 (7000+118000) Deduct: Ending raw materials inventory 15,000 given Raw materials used in production $110,000 (125000-15000) Direct labor 70,000 given Manufacturing overhead 90,000 given as applied Total manufacturing costs 270,000 (110000+70000+90000) Add: Beginning work in process inventory 0 270,000 (275000-5000) Deduct: Ending work in process inventory 5,000 given Cost of goods manufactured $275,000 given so ans is E None of the above. it is 0

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