The Work in Process Inventory account for DG Manufacturing follows. Compute the cost of jobs completed and transferred to Finished Goods Inventory. Work in Process Inventory DR CR Beginning balance $4,700 Direct materials 47,300 Direct labor 29,800 ? Finished goods Applied overhead 16,000 Ending balance $9,300

The cost of units transferred to finished goods is:

a. $93,100.

b. $97,800.

c. $88,500.

d. $96,000.

e. $107,100.

The correct answer is C

Explanation:

The cost of units that are transferred to the finished goods is computed as:

Work in Progress(WIP)  Ending balance = Work in Process Beginning  Inventory + Direct materials + Direct Labor + Applied Overhead - Finished goods

So,

Finished Goods = Work in Process Beginning  Inventory + Direct materials + Direct Labor + Applied Overhead - Work in Progress(WIP)  Ending balance

where

Work in Process Beginning  Inventory is $4,700

Direct materials is $47,300

Direct Labor is $29,800

Applied overhead is $16,000

Work in Progress(WIP)  Ending balance is $9,300

Putting the values above:

Finished Goods = $4,700 + $47,300 + $29,800 + $16,000 - $9,300

Finished Goods = $97,800 - $9,300

Finished Goods = $88,500