Jacob Company Incurred $7,000 for Indirect Labor in Department III

question 108

Multiple Choice

Jacob Company incurred $7,000 for indirect labor in Department III. The journal entry to record indirect labor utilized is:

• A)debit Manufacturing Overhead, $7,000; credit Accounts Payable, $7,000.
• B)debit Accounts Payable, $7,000; credit Manufacturing Overhead, $7,000.
• C)debit Manufacturing Overhead, $7,000; credit Wages Payable, $7,000.
• D)debit Wages Payable, $7,000; credit Manufacturing Overhead, $7,000.

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Definitions:

Time Value

The concept that money available today is worth more than the same amount in the future due to its potential earning capacity.

Profitability Index

A calculation used to assess the attractiveness of an investment, calculated as the present value of future cash flows divided by the initial investment.

Independent Project

A project that can be pursued without affecting the acceptance or funding of other projects, allowing for standalone consideration in decision-making.

Net Present Value

The contrast in the present value of money received and the present value of money spent over a designated duration, applied in capital budgeting to appraise the profitability of a potential investment.