Gia Machine Shop Uses a Predetermined Overhead Allocation Rate of $63.20

question 15

Multiple Choice

Gia Machine Shop uses a predetermined overhead allocation rate of $63.20 per direct labor hour. In January, Gia completed Job A23 which utilized 15 direct labor hours. Which of the following correctly describes the journal entry to allocate overhead to the job?

• A)Debit Finished Goods Inventory $948, credit Manufacturing Overhead $948
• B)Debit Manufacturing Overhead $63.20, credit Work-in-Process Inventory $63.20
• C)Debit Work-in-Process Inventory $948, credit Manufacturing Overhead $948
• D)Debit Cost of Goods Sold $63.20, credit Finished Goods Inventory $63.20

---

Definitions:

Traffic Congestion

Refers to the situation where there are more vehicles than the road can accommodate, leading to slower speeds, longer trip times, and increased vehicular queuing.

Marginal Social Cost

The total cost incurred by society when the production of a good or service is increased by one additional unit, including both private and external costs.

Common Resources

Goods that are non-excludable and rivalrous, meaning they are available to all but can be depleted by overuse.

Marginal Social Cost

This refers to the entire cost society bears for the production of an additional unit of a good, including both private costs borne by producers and external costs absorbed by others.