Wilson Enterprises Applies Overhead Based on Direct Labor Cost

question 35

Multiple Choice

Wilson Enterprises applies overhead based on direct labor cost.The company estimates that their overhead for the year will be $240,000,and direct labor cost to be $300,000.Actual direct labor cost for Martinez Manufacturing was $280,000.The journal entry to record manufacturing overhead would include a:

• A) Debit to Work in Process Inventory for $240,000.
• B) Credit to Manufacturing Overhead Applied for $350,000.
• C) Credit to Work in Process Inventory for $224,000.
• D) Credit to Manufacturing Overhead Applied for $224,000.

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Definitions:

Paid-In Capital

represents funds raised by a company through issuing securities like stocks, reflecting the additional amount over the par value that investors are willing to pay.

Common Stock

Common stock represents ownership shares in a corporation, giving holders voting rights and a share in the company's profits through dividends.

Par Value

A nominal value assigned to share of stock in the charter of a corporation, unrelated to market value.

Legal Expense

Costs incurred in the process of legal advice, litigation, or other legal services.