A Company Had Calculated Net Income to Be $77,550 Based

question 125

Multiple Choice

A company had calculated net income to be $77,550 based on the unadjusted trial balance.The following adjusting entries were then made: Salaries payable of $790 was recorded;Interest earned but not received from investments $750;Prepaid insurance decreased by $550 for insurance used up during the period;$750 of Unearned revenue has now been earned.After recording these adjustments,net income would be:

• A)$77,710.
• B)$74,710.
• C)$77,310.
• D)$79,600.

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Definitions:

Labor Cost

The total expense incurred by a company for the compensation of its employees.

Machine-Hours

A measure of the amount of time a machine is operated, used in cost accounting to allocate machine-related expenses to products.

Multiple Overhead Rate

A costing method that uses more than one overhead rate to allocate indirect costs to products more accurately.

Plantwide Overhead Rate

A single overhead rate calculated for an entire factory or plant, applied uniformly to all the production units, regardless of the department in which they were produced.