Minstrel Manufacturing Uses a Job Order Costing System

question 55

Multiple Choice

Minstrel Manufacturing uses a job order costing system.During one month,Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect.Minstrel incurred a factory payroll of $150,000,of which $40,000 was indirect labor.Minstrel uses a predetermined overhead rate of 150% of direct labor cost.
-The journal entry to record the issuance of materials to production is:

• A)Debit Raw Materials Inventory $195,000; credit Accounts Payable $195,000.
• B)Debit Work in Process Inventory $195,000; credit Raw Materials Inventory $195,000.
• C)Debit Raw Materials Inventory $195,000; credit Work in Process Inventory $195,000.
• D)Debit Work in Process Inventory $165,000; debit Factory Overhead $30,000; credit Raw Materials Inventory $195,000.
• E)Debit Finished Goods Inventory $195,000; credit Raw Materials Inventory $195,000.

---

Definitions:

Economies Of Scale

Operational scale increases lead to cost efficiencies for businesses, prominently reflecting in reduced production costs per unit as the amount of output grows.

Diseconomies Of Scale

The situation when a firm’s average total cost of producing a product increases in the long run as the firm increases the size of its plant (and, hence, its output).

Technologically Progressive

Characterized by innovative application of knowledge and technology to improve products, services, or processes.

Nondiscriminating

Nondiscriminating, in economic terms, often refers to pricing or marketing policies that do not vary between different consumers or groups, treating all participants equally.