The Journal Entry Necessary at the End of the Period

question 112

Multiple Choice

The journal entry necessary at the end of the period to transfer beginning inventory and net purchases to cost of goods sold will include which of the following?

• A) Credit Inventory, $6,250.
• B) Debit Purchases, $11,250.
• C) Debit Inventory, $6,250.
• D) Debit Cost of goods sold, $11,250.

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Definitions:

Standard Direct Labor-Hours

The estimated amount of labor hours required to produce a unit of product, used in budgeting and variance analysis.

Denominator Level

The activity level used to compute a predetermined overhead rate, often reflecting capacity or expected usage.

Budget Variance

The difference between budgeted figures for a set period and the actual figures achieved.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard cost allocated for the actual level of activity.