The Fabricating Department started the current month with a beginning Work in Process inventory of $10,500. During the month, it was assigned the following costs: direct materials, $76,500; direct labor, $24,500; and factory overhead, 60% of direct labor cost. Also, inventory with a cost of $111,500 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:

Ending work in process = $14,700

Explanation:

The production process is divided into different stages and includes Raw materials (unprocessed input), Work in process (a combination of processed and unprocessed input), and Finished goods.

In this scenario the work in process started out as $10,500

There was an addition of direct materials

Work in process will increase to 10,500 + 76,500 = $87,000

Other additions are direct labour and factory overhead

Direct labour = $24,500

Factory overhead = 0.6 * 24,500 = $14,700

Inventory cost will be deducted

Ending work in process = 87,000 + 24,500 + 14,700 - 111,500 = $14,700

the correct choice is a