Minstrel Manufacturing Uses a Job Order Costing System

question 145

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 factory payroll is:

• A)Debit Work in Process Inventory $150,000; debit Factory Overhead $40,000; credit Factory Wages Payable $190,000.
• B)Debit Work in Process Inventory $150,000; credit Cash $150,000.
• C)Debit Work in Process Inventory $110,000; debit Factory Overhead $40,000; credit Factory Wages Payable $150,000.
• D)Debit Work in Process Inventory $150,000; credit Factory Overhead $40,000; credit Factory Wages Payable $110,000.
• E)Debit Work in Process Inventory $110,000; credit Factory Overhead $40,000; credit Factory Wages Payable $150,000.

---

Definitions:

Price of Labor

The wage rate or compensation that employers pay workers in exchange for their labor or services.

Dollar Votes

The concept that consumers show their preferences for products and services by how they spend their money.

Market System

An economic system where prices are determined by the interaction of supply and demand, guiding the allocation of resources and goods.

Inflation

A rise in the general level of prices in an economy; an increase in an economy’s price level.