Pepper Products uses a job costing system. The company applies manufacturing overhead using a predetermined rate based on direct materials. The following debits (credits) appeared in Work-in-Process for April.

 Pepper Products uses a job costing system. The company applies manufacturing overhead using a predetermined rate based on direct materials. The following debits (credits) appeared in Work-in-Process for April.

 

Job 1947, the only job still in production at the end of April has been charged $6,600 in direct materials cost and $7,100 in direct labor cost. 

 

Required:

What was the beginning balance in Work-in-Process?

 

Explanation

This problem is a straight-forward inventory equation problem. It requires, however, the calculation of the cost accumulated in Job 1947 in order to determine the ending Work-in-Process balance. To get that, we need to calculate the predetermined overhead rate.

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