Figure 6-1 the Sinbad Company Has the Following Information for the Assembly

question 116

Multiple Choice

Figure 6-1 The Sinbad Company has the following information for the Assembly Department for October 2014:
Overhead rate is 200 percent of direct labor costs.
Allen Company uses a process costing system for the Assembly Department.
Refer to Figure 6-1. The journal entry to record goods completed and transferred out of the Assembly Department would include a

• A) debit to Finished Goods Inventory for $125,000.
• B) credit to Materials Inventory for $125,000.
• C) debit to Work in Process-Assembly Department for $125,000.
• D) debit to Work in Process-Finishing Department for $125,000.

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Definitions:

Variable Expenses

Costs that change in proportion to the activity of a business, such as sales commissions or raw materials.

Net Operating Income

is the total profit of a company after operating expenses are subtracted from revenue but before deducting interest and taxes.

Break-Even Sales

The amount of sales revenue required to cover all fixed and variable costs, resulting in zero net income or loss.

Variable Expenses

Variable expenses fluctuate in direct proportion to changes in activity level or volume, such as sales or production quantities.