Garcia Manufacturing Has Two Processes-Coloring and Mixing

question 53

Multiple Choice

Garcia Manufacturing has two processes-Coloring and Mixing.The company assigned $390,000 to the 6000 gallons of paint transferred from Mixing Department to Finished Goods Inventory.The journal entry to record this assignment of cost is ________.

• A) debit Work-in-Process Inventory-Mixing, $390,000; credit Finished Goods Inventory, $390,000
• B) debit Finished Goods Inventory, $390,000; credit Cost of Goods Sold, $390,000
• C) debit Cost of Goods Sold, $390,000; credit Finished Goods Inventory, $390,000
• D) debit Finished Goods Inventory, $390,000; credit Work-in-Process Inventory-Mixing, $390,000

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Definitions:

Materials Quantity Variance

This refers to the difference between the expected amount of materials needed for production and the actual amount used, which can impact manufacturing costs.

Predetermined Overhead Rate

A calculated rate used to allocate manufacturing overhead costs to products or job orders, based on a specific activity basis.

Variable Overhead

Costs that fluctuate with the level of production output, such as utilities or materials, unlike fixed overhead costs.

Total Overhead Variance

The difference between the actual overhead costs incurred and the overhead costs that were applied or allocated based on standard costing procedures.