Wayne Company Has Gathered the Following Data for the First

question 103

Essay

Wayne Company has gathered the following data for the first year of its operations:
$\begin{array}{ll}\text { Direct materials purchased for cash } & \$ 26,000 \\\text { Direct materialsrequisitioned } & 20,000 \\\text { Direct- labor costs incurred } & 40,000 \\\text { Factory overhead costs incurred } & 35,000\\\text { Overhead applied ( } 90 \% \text { of direct labor) } & ? \\\text { Cost of goods completed } & 80,000 \\\text { Cost of goods sold } & 75,000 \\\text { Sales for cash } & 160,000\end{array}$ Prepare general journal entries for the above transactions.

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Definitions:

Marginal Revenue

The additional income gained from selling one more unit of a good or service.

Purely Competitive

An alternative term for pure competition, describing a market structure with a high degree of competition, including many sellers offering identical products and free market entry and exit.

Minimum AVC

The lowest point on the average variable cost curve, indicating the most efficient scale of production with respect to variable costs.

Total Fixed Costs

The sum of all costs required to produce any level of output that remains unchanged, regardless of the level of production or sales.