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Sample Solution: Cost Accounting

5. Assume that the following events occurred at a division of Admiral Enterprises for the current year.

(1) Purchased $900,000 in direct materials.
(2) Incurred direct labor costs of $520,000.
(3) Determined that manufacturing overhead was $820,000.
(4) Transferred 75% of the materials purchased to Work-in-Process Inventory.
(5) Completed work on 60% of the work in process. Costs assigned equally across all work-in-process.
(6) The inventory accounts have no beginning balances. All costs incurred were debited to the appropriate account and credited to Accounts Payable.

Compute the following amounts in the Work-in-Process Inventory account:

(a) Transfers-in (TI).
(b) Transfers-out (TO).
(c) Ending balance (EB).

Solution Summary

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