An Employee Earns $1 000 a Week and the Following

question 9

Multiple Choice

An employee earns $1 000 a week and the following deductions are made: income tax $150, superannuation $90 and union dues $20. The journal entry to record this transaction would include:

• A) DR Wages expense $740
• B) CR Wages payable $1 000
• C) DR Wages expense $1 000
• D) None of the above

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Definitions:

Predetermined Overhead Rate

The predetermined overhead rate is a rate that is calculated before a period begins, used to allocate estimated overhead costs to cost objects based on a chosen activity base.

Machine-Hours

A measure of the amount of time a machine is operated, typically used in manufacturing to determine production costs or capacity.

Predetermined Overhead Rate

A rate determined prior to the start of a period, designed for assigning anticipated overhead expenses to products or job orders, utilizing a selected activity basis for calculation.

Manufacturing Overhead

Costs in the manufacturing process that are not direct labor or materials.