Which of the Following Shows the Effect on Work in Process

question 108

Multiple Choice

Which of the following shows the effect on work in process inventory when assigning direct labor costs to the production process?

• A)Debited for standard quantity of direct labor used for actual production times standard cost per hour
• B)Debited for actual quantity of direct labor times standard cost per hour
• C)Credited for standard quantity of direct labor used for actual production times standard cost per hour
• D)Credited for standard quantity usage of direct labor for actual production times actual cost per hour

---

Definitions:

Gross Margin

The difference between revenue and cost of goods sold, divided by revenue, expressed as a percentage; it measures how efficiently a company uses its resources to make products.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production, based on a selected activity base such as machine hours or labor hours.

Machine-Hours

A unit of measure that represents the operational time of a machine, often used to allocate manufacturing overhead costs to products.

Unused Capacity

The available production or service facility that is not being used or is underutilized.