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Question
Docksider Boats uses a job order cost accounting system. During one month Docksider purchased $153,000 of raw materials on credit; issued materials to production of $164,000 of which $24,000 were indirect. Docksider incurred a factory payroll of $95,000, paid in cash, of which $25,000 is classified as indirect labor. Docksider uses a predetermined overhead application rate of 170% of direct labor cost. The journal entry to record the allocation of factory payroll to production is:
A. Debit Goods in Process Inventory $95,000; credit Factory Payroll $95,000.
B. Debit Goods in Process Inventory $95,000; credit Cash $95,000.
C. Debit Factory Payroll $95,000; credit Cash $95,000.
D. Debit Goods in Process Inventory $70,000; debit Factory Overhead $25,000; credit Factory Payroll $95,000.
E. Debit Goods in Process Inventory $70,000; debit Factory Overhead $25,000; credit Cash $95,000.
Answer
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Related questions
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