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Question
Bard Manufacturing uses a job order cost accounting system. During one month Bard purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect. Bard incurred a factory payroll of $150,000, paid in cash, of which $40,000 is classified as indirect labor. Bard uses a predetermined overhead application rate of 150% of direct labor cost. The journal entry to record the allocation of the factory payroll to production is:
A. Debit Goods in Process Inventory $150,000; credit Factory Payroll $150,000.
B. Debit Goods in Process Inventory $150,000; credit Cash $150,000.
C. Debit Factory Payroll $150,000; credit Cash $150,000.
D. Debit Goods in Process Inventory $110,000; debit Factory Overhead $40,000; credit Factory Payroll $150,000.
E. Debit Goods in Process Inventory $110,000; debit Factory Overhead $40,000; credit Cash $150,000.
Answer
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Related questions
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