Minstrel Manufacturing Uses a Job Order Costing System

question 88

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 application of factory overhead to production is:

• A) Debit Factory Overhead $165,000; credit Work in Process Inventory $165,000.
• B) Debit Factory Payroll $150,000; credit Work in Process Inventory $150,000.
• C) Debit Work in Process Inventory $225,000; credit Factory Overhead $225,000.
• D) Debit Work in Process Inventory $165,000; credit Factory Payroll $165,000.
• E) Debit Work in Process Inventory $165,000; credit Factory Overhead $165,000.