Allen Company Has the Following Information for the Assembly Department

question 56

Multiple Choice

Allen Company has the following information for the Assembly Department for October:
$\begin{array}{lr}\text { Materials purchased } & \$ 40,000 \\\text { Materials used } & 44,000 \\\text { Direct labour } & 30,000 \\\text { Actual manufacturing overhead } & 56,000 \\\text { Cost of goods completed and transferred to the Finishing Dept. } & 120,000\end{array}$
Overhead rate is 200 percent of direct labour costs.
Allen Company uses a process costing system for the Assembly Department.
-Refer to the figure.What debit or credit would the journal entry to record materials purchased include?

• A)a debit to materials inventory for $40,000
• B)a debit to materials inventory for $44,000
• C)a credit to accounts payable for $44,000
• D)a debit to accounts payable for $40,000

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