Here Is Some Basic Data for Wharton Company The Journal Entry to Record the Cost of Raw Materials

question 179

Multiple Choice

Here is some basic data for Wharton Company: $\begin{array}{|l|r|}\hline \text { Cost of materials purchases on account } & \$ 75,000 \\\hline \text { Cost of materials requisitioned (includes } \$ 2,000 \text { of indirect) } & 43,000 \\\hline \text { Direct labor costs incurred } & 75,000 \\\hline \text { Manufacturing overhead costs incurred, including indirect materials } & 95,000 \\\hline \text { Cost of goods completed } & 226,750 \\\hline \text { Cost of goods sold } & 138,000 \\\hline \text { Beginning raw materials inventory } & 15,000 \\\hline \text { Beginning work in process inventory } & 32,000 \\\hline \text { Beginning finished goods inventory } & 31,000 \\\hline \text { Predetermined manufacturing overhead rate (as \% of direct labor cost) } & 125 \% \\\hline\end{array}$
The journal entry to record the cost of raw materials placed into production involves a:

• A)debit to overhead for $41,000.
• B)debit to work in process inventory for $43,000.
• C)debit to work in process inventory for $41,000.
• D)credit to manufacturing overhead for $2,000.

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Definitions:

Free Markets

Economic systems in which the prices for goods and services are determined by the open market and consumers, without government intervention.

Equilibrium Price

The rate in the marketplace at which the volume of goods being offered is the same as the volume of goods being sought.

Equilibrium Quantity

The quantity of a good or service at which demand meets supply.

Supply Decreases

A situation in which the quantity of a product or service offered in the market declines due to various factors like increased production costs or reduced number of suppliers.