During the month of May, Blackburn Inc. had cost of goods manufactured of $120,000, direct materials cost of $60,000, direct labour cost of $37,000, and manufacturing overhead cost of $26,000. The work-in-process balance at May 31 equalled $10,000. What was the work-in-process balance on May 1?

Here is what I did: (obviously wrong)

Cost of Goods Manufactured = 120,000

Direct Material = 60,000

Direct Labour = 37,000

Manufacturing OH = 26,000

WIP = 10,000 (Ending Balance)

Since Product Cost = DM+DL+OH therefore:

Product Cost = 60,000 + 37,000 + 26,000 = 123,000

and then:

Cost Of Goods Manufacturered = Total Product Cost + Beginning - Ending Balance

120,000 = 123,000 + x + 10,000

120,000 = 123,000 + 10,000 + x

120,000 - 133,000 = x

x = 13,000

Which should be the WIP Balance (Beginning Balance). But the answer is incorrect. The answer should be 7,000.

Please let me know where i went wrong, Thank you.