Answer the Following Questions Using the Information Below:
Wayland Manufacturing

question 9

Multiple Choice

Answer the following questions using the information below:
Wayland Manufacturing uses a normal cost system and had the following data available for 2010:
$\begin{array}{lr}\text { Direct materials purchased on account } & \$ 148,000 \\\text { Direct materials requisitioned } & 82,000 \\\text { Direct labor cost incurred } & 130,000\\\\\text { Factory overhead incurred } & 146,000 \\\text { Cost of goods completed } & 292,000 \\\text { Cost of goods sold } & 256,000\\\\\text { Beginning direct materials inventory } & 26,000 \\\text { Beginning WIP inventory } & 64,000 \\\text { Beginning finished goods inventory } & 58,000 \\\text { Overhead application rate, as a percent of direct-labor costs } & 125 \text { percent }\end{array}$
-The journal entry to record the materials placed into production would include a ________.

• A) credit to Direct Materials Inventory for $82,000
• B) debit to Direct Materials Inventory for $148,000
• C) credit to WIP Inventory for $82,000
• D) debit to WIP Inventory for $148,000

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Definitions:

Fixed Costs

Costs that do not change with the level of production or sales activities within a certain range or period of time, such as rent, salaries, and insurance.

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, indicating how much contributes to covering fixed costs and generating profit.

Variable Cost

Expenses that change in proportion to the volume of output or sales, including items like labor and materials.

Option To Wait

A choice or right, but not the obligation, to delay a business decision or investment, recognizing the value of flexibility in decision-making under uncertain conditions.