Portside Watercraft Uses a Job Order Costing System

question 75

Multiple Choice

Portside Watercraft uses a job order costing system.During one month Portside purchased $153,000 of raw materials on credit;issued materials to production of $164,000 of which $24,000 were indirect.Portside incurred a factory payroll of $95,000,paid in cash,of which $25,000 was indirect labor.Portside uses a predetermined overhead rate of 170% of direct labor cost.The journal entry to record the allocation of factory payroll to production is:

• A)Debit Work in Process Inventory $95,000;credit Factory Payroll $95,000.
• B)Debit Work in Process Inventory $95,000;credit Cash $95,000.
• C)Debit Factory Payroll $95,000;credit Cash $95,000.
• D)Debit Work in Process Inventory $70,000;debit Factory Overhead $25,000;credit Factory Payroll $95,000.
• E)Debit Work in Process Inventory $70,000;debit Factory Overhead $25,000;credit Cash $95,000.

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Definitions:

Credit Expansion

refers to the increase in the availability of loans or credit in an economy, often leading to increased investment and consumption.

Malinvestment

The allocation of resources in a manner where the return does not justify the initial investment, often due to poor planning or understanding of the market.

Hair Dryers

Electrical devices used to dry and style hair by blowing hot air over it.

Quantity Supplied

The amount of a certain good or service that producers are willing and able to sell at a given price during a specific time period.