Use This Information to Answer the Following Question The Entry on January 20 Would Be a Debit to Has

question 67

Multiple Choice

Use this information to answer the following question. Baker Company has the following information for the pay period of January 1-15,2010.Payment occurs on January 20.
$\begin{array}{lrlr}\text { Gross payroll } & \$ 16,000 & \text { Federal income taxes withheld } & \$ 1,800 \\\text { Social security and Medicare rate } & 7.65 \% & \text { Federal unemployment tax rate } & .8 \%\\\\\text { State unemployment tax rate}&5.4 \%\end{array}$

The entry on January 20 would be a debit to

• A) Salaries Payable and a credit to Cash.
• B) Salaries Payable and a credit to Salaries Expense.
• C) Salaries Expense and a credit to Cash.
• D) Salaries Expense and a credit to Salaries Payable.

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Definitions:

Fixed Manufacturing Overhead

Costs related to production that do not vary with the level of output, including salaries of permanent staff and rent of factory premises.

Budget Variance

The difference between the actual fixed overhead costs and the budgeted fixed overhead costs for the period.

Applied

Refers to the process of allocating or assigning costs to a specific cost object in a manner that is consistent with the usage or benefits derived from it.

Denominator Activity Level

A term used in cost accounting to represent the total activity or volume that is used to allocate fixed costs to units of output.