Dacosta Corporation Had Only One Job in Process on May

question 8

Multiple Choice

Dacosta Corporation had only one job in process on May 1. The job had been charged with $1,800 of direct materials, $6,966 of direct labor, and $9,936 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $18.40 per direct labor-hour.
During May, the following activity was recorded:
Work in process inventory on May 30 contains $3,741 of direct labor cost. Raw materials consist solely of items that are classified as direct materials.
-The entry to dispose of the underapplied or overapplied manufacturing overhead cost for the month would include a:

• A) credit of $5,336 to Manufacturing Overhead.
• B) credit of $1,660 to Manufacturing Overhead.
• C) debit of $5,336 to Manufacturing Overhead.
• D) debit of $1,660 to Manufacturing Overhead.

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Definitions:

Labor Supplied

Refers to the total hours of work that workers are willing and able to provide at a given wage rate over a certain period.

Income Effect

The change in an individual's or economy's income and how that change will impact the quantity demanded of a good or service.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, leading a consumer to substitute one good for another.

Labor Supplied

Represents the total hours that workers are willing and able to work at a given wage rate.