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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 application of factory overhead to production is:
A. Debit Goods in Process Inventory $55,800; credit Factory Overhead $55,800.
B. Debit Goods in Process Inventory $161,500; credit Factory Overhead $161,500.
C. Debit Goods in Process Inventory $119,000; credit Factory Overhead $119,000.
D. Debit Factory Overhead $119,000; credit Goods in Process Inventory $119,000.
E. Debit Goods in Process Inventory $95,000; credit Factory Payroll $95,000.
Answer
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Related questions
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Although a fixed budget is only useful over the relevant range of operations, a flexible budget is useful over all possible production levels.
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A fixed budget performance report never provides useful information for evaluating variances.
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Use the following information to prepare a budgeted income statement for Arbor Company for the month of June.
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b. Cash receipts from sales: 40% is collected in the month of sale, 50% in the next month, and 10% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: April (actual), $1,450,000, May (actual), $1,600,000, and June (budgeted), $1,700,000.
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Use the following information to prepare the June cash budget for Arbor Company. It should show expected cash receipts and cash disbursement for the month and the cash balance expected on June 30.
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