Baldwin, Inc Uses a Standard Job Cost System and Purchased

question 36

Multiple Choice

Baldwin, Inc uses a standard job cost system and purchased 25,000 kg of material at $6 per kg, and used it all. The standard amount allowed for the output achieved is 22,500 kg, and the standard price is $6.50 per kg. The company also incurred 37,500 direct labour hours for $450,000. The standard hourly price was $11 per hour, and 39,000 hours were allowed at standard. Assuming all variances are immaterial, answer the following questions:
The entry to record the direct labour variances will include a:

• A) Credit to wages payable for $429,000
• B) Debit to wages expense for $450,000
• C) Debit to work in process inventory for $412,500
• D) Credit to direct labour efficiency variance for $16,500

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Definitions:

Nonconforming Use

A land-use situation where a property is utilized in a manner that does not comply with the current zoning laws, but has been allowed because it predated zoning regulations.

Zoning Ordinances

Laws regulating the use of land and buildings within specific areas to control and direct property development.

Assumes the Mortgage

The process by which a buyer takes over the seller's mortgage as part of the terms of purchasing a home.

Personally Liable

Refers to the direct responsibility an individual has to fulfill an obligation or debt, making their personal assets vulnerable to being claimed in the event of non-fulfillment.