When Recording Direct Labor Incurred in the Production Process, Which

question 135

Multiple Choice

When recording direct labor incurred in the production process, which of the following shows the effect on Work in process inventory?

• A) Debit for standard quantity for actual production times standard cost per hour
• B) Credit for standard quantity usage for actual production times actual cost per hour
• C) Debit for actual quantity times standard cost per hour
• D) Credit for standard quantity for actual production times standard cost per hour

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Definitions:

TC

An abbreviation for Total Cost, it quantifies the overall expense incurred in the production of goods or services, encompassing both fixed and variable costs.

Diseconomies of Scale

The phenomenon where production costs per unit increase as a firm's output expands, often due to complexities and inefficiencies at larger scales.

Long-Run Average Total Cost

The cost per unit of output incurred when all factors of production, including capital, are variable, indicating the lowest possible cost of production for each level of output when the scale of operation is changed.

Total Variable Cost

The sum of all costs that vary directly with the level of production or output, including costs for materials, labor, and energy.