Which of the Following Would Be Used to Record the Labor

question 19

Multiple Choice

Which of the following would be used to record the labor cost that is traceable to a specific job?

• A) Raw Materials Inventory would be debited.
• B) Work in Process Inventory would be debited.
• C) Manufacturing Overhead would be debited.
• D) Manufacturing Overhead would be crediteD.
• As direct labor costs are incurred, they are recorded with a debit to Work in Process Inventory.

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Definitions:

MC

An abbreviation commonly used for "Marginal Cost," which refers to the additional cost incurred by producing one more unit of a good or service.

Liability Rule

A legal principle that allocates the economic burden of damages to the party responsible for causing harm.

Coase Theorem

A principle stating that if trade in an externality is possible and there are no transaction costs, parties will negotiate to produce an efficient outcome.

Free-Rider Problem

A situation in which individuals benefit from resources or services without paying for them, leading to underprovision of those goods.