Michael Paints Used a Predetermined Overhead Allocation Rate to Allocate

question 31

Multiple Choice

Michael Paints used a predetermined overhead allocation rate to allocate $75,000 and $65,000 of indirect costs to Coloring Department and Mixing Department, respectively. The journal entry to record the allocation of overhead costs to the Coloring Department is:

• A)debit Manufacturing Overhead, $75,000; credit Work-in-Process Inventory-Mixing, $75,000.
• B)debit Work-in-Process Inventory-Coloring, $75,000; credit Manufacturing Overhead, $75,000.
• C)debit Work-in-Process Inventory-Coloring, $65,000; credit Manufacturing Overhead, $65,000.
• D)debit Manufacturing Overhead, $65,000; credit Work-in-Process Inventory-Mixing, $65,000.

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Definitions:

Coupon Rate

The coupon rate is the annual interest rate paid on a bond, expressed as a percentage of the face value.

Yield To Maturity

The total return anticipated on a bond if the bond is held until its maturity date, factoring in its current market price, par value, interest payments, and time to maturity.

Current Yield

The yearly earnings from interest or dividends, when divided by the security's current market price.

Capital Gains Yield

Results from changing prices and is calculated as (P1 - P0)/P0, where P0 is the beginning-of-period price and P1 is the end-of-period price.