Michael Paints Used a Predetermined Overhead Allocation Rate to Allocate

question 31

Multiple Choice

Michael Paints used a predetermined overhead allocation rate to allocate $75,000 and $65,000 of indirect costs to Coloring Department and Mixing Department, respectively. The journal entry to record the allocation of overhead costs to the Coloring Department is:

• A)debit Manufacturing Overhead, $75,000; credit Work-in-Process Inventory-Mixing, $75,000.
• B)debit Work-in-Process Inventory-Coloring, $75,000; credit Manufacturing Overhead, $75,000.
• C)debit Work-in-Process Inventory-Coloring, $65,000; credit Manufacturing Overhead, $65,000.
• D)debit Manufacturing Overhead, $65,000; credit Work-in-Process Inventory-Mixing, $65,000.

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Definitions:

Groupthink

A psychological phenomenon occurring within a group of people, in which the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Flawed Decisions

Pertains to decisions that are made based on incorrect information, biases, or errors in judgment, leading to less than optimal outcomes.

Propinquity

Refers to the physical or psychological proximity between people.

Collectivist Society

A society that emphasizes communal goals, cooperation, and the welfare of the group over individual interests.