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A month ends with materials of $1,840, work in process of $6,760 and finished goods of $3,230. What total inventory appears in current assets?
A$8,600
B$10,000
C$11,830
D$12,590
Answer & Solution
Correct answer: C. $11,830
1. All three inventory ledger balances are reported together in current assets.
2. The balances are materials $1,840, work in process $6,760 and finished goods $3,230.
3. Total inventory is $1,840 plus $6,760 plus $3,230, which is $11,830.
4. $10,000 drops the materials balance, which is still an asset even though it has not entered production.
_Source: Jonick, Principles of Managerial Accounting (UNG Press, CC BY-SA 4.0), section 2.2 Comprehensive Example of Job Order Costing Transactions for a Manufacturing Company_
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