Work in Process Inventory: t Account Analysis
On July 1, Tin Hau Company's Work in Process Inventory account showed a beginning balance of $9,000. The Materials Inventory account showed a beginning balance of $40,000. Production activity for July was as follows: (a) Direct materials costing $28,800 were requested for production; (b) total production-related payroll was $10,600, of which $2,600 was used to pay for indirect labor; (c) indirect materials costing $8,400 were purchased and used; and (d) overhead was applied at a rate of 120 percent of direct labor costs.
1. Record Tin Hau's materials, labor, and overhead costs for July in T accounts.
2. Compute the ending balance in the Work in Process Inventory account. Assume a transfer of $45,000 to the Finished Goods Inventory account during the period.