The Fabricating Department started the current month with a beginning Work in Process inventory of $11,200. During the month, it was assigned the following costs: direct materials, $77,200; direct labor, $25,200; and factory overhead, 50% of direct labor cost. Also, inventory with a cost of $115,000 was transferred out of the department to the next phase in the process. The ending balance of the Work in Process Inventory account for the Fabricating Department is:

The ending balance of the Work in Process Inventory account for the Fabricating Department is: $11,200

Explanation:

To determine Ending Balance of Work in Process Inventory, Prepare a Manufacturing Cost Statement.

Opening Work in Process Inventory             $11,200

Add Cost Added During the Period :

Direct materials                                             $77,200

Direct labor                                                   $25,200  

Factory overhead ( $25,200 × 50%)            $12,600

Total Manufacturing Costs                          $126,200

Less Transfer to Next Department            ($115,000)

Closing Work in Process Inventory               $11,200

Conclusion :

Therefore, the ending balance of the Work in Process Inventory account for the Fabricating Department is: $11,200

Option B, have no effect on total assets, is the right answer.

Explanation:

Option “B” is correct because if the payment is received from the customer then it will increase the cash account or it will increase the stockholders’ equity but will have no effect on the total assets. The total assets account gets affected when there are sale and purchase of assets or there is any loss of gain of assets. But in the given case there is no relation with the assets account so it will have no effect.