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

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Definitions:

Proportionate Price

A price or value that has been adjusted based on a certain proportion or percentage of a whole.

Overhead Costs

The indirect expenses related to the operation of a business, such as rent, utilities, and administrative salaries, that are not directly tied to a specific product or service.

Pharmaceutical Distribution

The process of getting pharmaceutical products from the manufacturer to pharmacies, hospitals, and other end-points where they will be sold or dispensed.

IT Staff

Employees or team members responsible for managing and maintaining information technology and computer systems within an organization.