Which of the Following Pair of Journal Entries Correctly Records

question 188

Multiple Choice

Which of the following pair of journal entries correctly records the current month's activity where the company had $21,030 in total factory labor costs that were paid in cash with $16,200 of this total for direct labor?

• A)\(\begin{array}{l}
• \text { Factory Payroll } & 21,030 \\
• \text { Cash } && 21,030 \\
• & \\
• \text { Wage Expense } & 16,200 \\
• \text { Factory Overhead } & 4,830\\
• \text { Factory Payroll }&& 21,030
• \end{array}\)
• B)\(\begin{array}{lrr}
• \text { Factory Payroll } & 21,030 & \\
• \quad \text { Cash } & & 21,030 \\
• & & \\
• \text { Goods in Process Inventory } & 16,200 & \\
• \text { Wage Expense } & 4,830 & \\
• \quad \text { Factory Payroll } & & 21,030
• \end{array}\)
• C)\(\begin{array}{lrr}
• \text { Cash } & 21,030 & \\
• \quad \text { Factory Payroll } & & 21,030 \\
• & & \\
• \text { Goods in Process Inventory } & 16,200 & \\
• \text { Factory Overhead } & 4,830 & \\
• \quad \text { Factory Payroll } & & 21,030
• \end{array}\)
• D)\(\begin{array}{lrr}
• \text { Factory Payroll }& 21,030 \\
• \quad \text { Cash }&& 21,030 \\
• & \\
• \text { Goods in Process Inventory } & 16,200 & \\
• \text { Factory Overhead } & 4,830 \\
• \quad \text { Factory Payroll } & & 21,030
• \end{array}\)
• E)\(\begin{array}{lcc}
• \text { Cash } & 21,030 & \\
• \quad \text { Factory Payroll } & & 21,030 \\\\
• \text { Factory Payroll }& 21,030 \\
• \text { Goods in Process Inventory }&& 21,030 \end{array}\)

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Definitions:

Fixed Manufacturing Overhead Budget

A predetermined estimate of the total fixed costs required to support production activities, excluding variable costs directly tied to production volume.

Volume Variances

Variances that occur when actual volume of production or sales differs from the planned volume, affecting revenue and expenses.

Variable Component

The portion of a cost or expense that varies directly with the level of production or business activity.

Fixed Component

The part of cost or expense that remains constant in total regardless of fluctuations in the level of activity or volume.