At the End of the Year, Martin Company Has a Preliminary

question 43

Multiple Choice

At the end of the year, Martin Company has a preliminary credit balance in the Manufacturing overhead account of $95. Which of the following is the year- end adjusting entry needed to clear the balance to zero?

• A)Debit Manufacturing overhead $95, credit Cost of sales $95
• B)Debit Cost of sales $95, credit Finished goods inventory $95
• C)Debit Cost of sales $95, credit Manufacturing overhead $95
• D)Debit Manufacturing overhead $95, credit Finished goods inventory $95

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Definitions:

Compensating Differentials

Wage differentials that compensate workers for the job attributes, such as difficulty level or undesirable conditions, indicating the premium required to attract workers to these positions.

Marginal Productivity Theory

A principle that describes how the addition of a unit of labor or capital increases output, holding other factors constant.

Unequal Distribution

A situation where resources, wealth, or opportunities are not evenly shared among members of a society.

Median Earnings

The midpoint of income distribution, meaning that half of the workers earn more than this amount and half earn less.