Questions: Work in process inventory on December 31 of the current year is 44,000. Work in process inventory increased by 60% during the year. Cost of goods manufactured amounts to 275,000. The total manufacturing costs incurred in the current year are a. 302,000 b. 275,750 c. 233,750 d. 291,500

Solution Steps

To find the total manufacturing costs incurred in the current year, we need to determine the beginning work in process inventory and then use the formula for total manufacturing costs:

1. Calculate the beginning work in process inventory using the given increase percentage.
2. Use the formula: \[ \text{Total Manufacturing Costs} = \text{Cost of Goods Manufactured} + \text{Ending Work in Process Inventory} - \text{Beginning Work in Process Inventory} \]

Given:

• Ending work in process inventory: \( \$44,000 \)
• Increase percentage: \( 60\% \)

The beginning work in process inventory can be calculated as: \[ \text{Beginning Work in Process Inventory} = \frac{\text{Ending Work in Process Inventory}}{1 + \text{Increase Percentage}} \] \[ \text{Beginning Work in Process Inventory} = \frac{44000}{1 + 0.6} = \frac{44000}{1.6} = 27500 \]

Given:

• Cost of goods manufactured: \( \$275,000 \)
• Ending work in process inventory: \( \$44,000 \)
• Beginning work in process inventory: \( \$27,500 \)

The total manufacturing costs can be calculated using the formula: \[ \text{Total Manufacturing Costs} = \text{Cost of Goods Manufactured} + \text{Ending Work in Process Inventory} - \text{Beginning Work in Process Inventory} \] \[ \text{Total Manufacturing Costs} = 275000 + 44000 - 27500 = 291500 \]

Final Answer