Pro Incorporated Operates Five Days Per Week with a Daily

question 77

Multiple Choice

Pro Incorporated operates five days per week with a daily payroll of $5,000. Employees are paid every Saturday for the workweek just completed (Monday through Friday) . The last day of the month is Wednesday, October 31. What is the effect of the correct adjustment at October 31?

• A) Increases stockholders' equity and wages payable by $15,000
• B) Increases wages payable and decreases cash by $10,000
• C) Decreases stockholders' equity and increases wages payable by 15,000
• D) Increases wages payable and increases wages expense by $25,000

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Definitions:

Standard Labor Cost

The predetermined cost of the labor required to produce one unit of a product, considering factors like wage rates and productivity levels.

Direct Materials Data

Information regarding the raw materials used directly in the production of goods, crucial for cost accounting.

Standard Materials Price

The predetermined cost of materials that is used in setting a product's budget and evaluating its actual cost performance.

Finished Product

A good that has completed the manufacturing process and is ready to be sold to customers.