Altec Designs Makes Fashion Clothing and Reports the Following Data

question 79

Multiple Choice

Altec Designs makes fashion clothing and reports the following data for the month of September: $$\begin{array} { | l | r | } \hline \text { Salaries paid to seamstresses } & \$ 130,000 \\\hline \text { Wages paid to fabric cutters } & 30,000 \\\hline \text { Indirect wages } & 7,000 \\\hline\end{array}$$ What is the journal entry to record the total labor charges incurred during September?

• A) \[\begin{array} { | c | r | r | }
• \hline \text { Work-in-Process Inventory } & 160,000 & \\
• \hline \text { Manufacturing Overhead } & 7,000 & \\
• \hline \text { Wages Payable } & & 167,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | r | r | }
• \hline \text { Work-in-Process Inventory } & 167,000 & \\
• \hline \text { Wages Payable } & & 167,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Wages Payable } & 167,000 & \\
• \hline \text { Finished Goods Inventory } & & 137,000 \\
• \hline \text { Work-in-Process Inventory } & & 30,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | r | r | }
• \hline \text { Manufacturing Overhead } & 167,000 & \\
• \hline \text { Wages Payable } & & 167,000 \\
• \hline
• \end{array}\]

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Definitions:

Equivalent Units

Equivalent units are used in cost accounting to express the amount of work done on incomplete products in terms of fully completed units of output.

Materials

Raw items or components that are used to manufacture a finished product.

FIFO Method

First-In, First-Out methodology in inventory and cost accounting that assumes the first items produced or acquired are the first ones sold.

Equivalent Units

A concept used in cost accounting to denote the amount of finished goods units that could have been produced given the total amount of direct materials, labor, and overhead costs incurred.