Here Is Selected Data for Lorelei Corporation - the Journal Entry to Close Manufacturing Overhead Would Include

question 105

Multiple Choice

Here is selected data for Lorelei Corporation: $$\begin{array} { | l | r | } \hline \text { Cost of raw material purchased } & \mathbf { 7 5 , 0 0 0 } \\\hline \text { Cost of requisitioned direct materials } & 41,000 \\\hline \text { Cost of requisitioned indirect materials } & 2,000 \\\hline \text { Direct labor } & 75,000 \\\hline \text { Manufacturing overhead incurred } & 95,000 \\\hline \text { Cost of goods completed } & 226,750 \\\hline \text { Cost of goods sald } & 138,000 \\\hline \text { Bepinging raw materials inventory } & 15,000 \\\hline \text { Bepining wark in process inventory } & 32,000 \\\hline \text { Bepinging finished goods inventory } & 31,000 \\\hline \begin{array} { l } \text { Manufacturing overhead allocation rate (based an } \\\text { direct labor) }\end{array} & 125 \% \\\hline\end{array}$$
- The journal entry to close manufacturing overhead would include a:

• A)credit to manufacturing overhead for $1,250.
• B)debit to work in process inventory for $1,250.
• C)debit to manufacturing overhead for $1,250.
• D)credit to cost of goods sold for $1,250.

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Definitions:

Distortions

Refers to alterations or imperfections in economic market conditions that lead to inefficient resource allocation and outcomes.

Consumption

Spending by households on goods and services, with the exception of purchases of new housing.

Money Balances

The total amount of money held by individuals or entities in the form of cash or bank deposits.

Wealth Redistribution

The transfer of income and wealth from some individuals to others by means of a social mechanism such as taxation, public services, or welfare.