Morewell,Inc

question 131

Multiple Choice

Morewell,Inc.used a predetermined overhead allocation rate to allocate $85,000 and $65,000 of indirect costs to Coloring Department and Mixing Department,respectively.The journal entry to record the allocation of overhead costs to the Coloring Department is ________.

• A) debit Manufacturing Overhead, $85,000; credit Work-in-Process Inventory-Mixing, $85,000
• B) debit Work-in-Process Inventory-Coloring, $85,000; credit Manufacturing Overhead, $85,000
• C) debit Work-in-Process Inventory-Coloring, $65,000; credit Manufacturing Overhead, $65,000
• D) debit Manufacturing Overhead, $65,000; credit Work-in-Process Inventory-Mixing, $65,000

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Definitions:

Marginal Benefits

The additional satisfaction or value that one receives from consuming or producing one more unit of a good or service.

Production Possibilities

A curve or frontier that shows various combinations of the amounts of two goods or services that can be produced within the limits of available resources and technology.

Specialization

The process or strategy of focusing on a narrow area of expertise or production to gain efficiency or quality in the output.

Production Possibilities Curve

A graphical representation of the maximum goods and services that a society can produce, given its productive resources and technology.