Farrel Corporation Is a Manufacturer That Uses Job-Order Costing What Is the Journal Entry to Record the Direct and Has

question 67

Multiple Choice

Farrel Corporation is a manufacturer that uses job-order costing.The company has supplied the following data for the just completed year:
$\begin{array}{lr}\text {Direct labor cost. }&\$574,000\\\text {Manufacturing overhead: }\\\text {Indirect labor cost }&\$163,000\\\text {Other manufacturing overhead costs incurred }&\$584,000\\\end{array}$
What is the journal entry to record the direct and indirect labor costs incurred during the year?

• A) \(\begin{array}{lr} \text {Wages Payable }&737,000\\ \text {Direct Labor. }&&574,000\\ \text {Manufacturing Overhead }&&163,000\\ \end{array}\)
• B) \(\begin{array}{lr} \text {Work in Process }&574,000\\ \text {Manufacturing Overhead. }&163,000\\ \text {Wages Payable }&&737,000\\ \end{array}\)

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Definitions:

Long-Run Cost Function

An economic concept reflecting the total cost of production where all inputs can be fully adjusted to minimize costs.

Positive Output

The result of production processes or economic activities that yield a beneficial or productive outcome.

Production Function

An equation or formula that describes the relationship between inputs (like labor and capital) and the output of goods or services.

Factor Prices

The prices of the inputs used in the production process, such as labor and capital.