Docksider Boats Uses a Job Order Cost Accounting System

question 22

Multiple Choice

Docksider Boats uses a job order cost accounting system. During one month Docksider purchased $153,000 of raw materials on credit; issued materials to production of $164,000 of which $24,000 were indirect. Docksider incurred a factory payroll of $95,000, paid in cash, of which $25,000 is classified as indirect labor. Docksider uses a predetermined overhead application rate of 170% of direct labor cost. The journal entry to record the application of factory overhead to production is:

• A) Debit Goods in Process Inventory $55,800; credit Factory Overhead $55,800.
• B) Debit Goods in Process Inventory $161,500; credit Factory Overhead $161,500.
• C) Debit Goods in Process Inventory $119,000; credit Factory Overhead $119,000.
• D) Debit Factory Overhead $119,000; credit Goods in Process Inventory $119,000.
• E) Debit Goods in Process Inventory $95,000; credit Factory Payroll $95,000.

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Definitions:

Sales Revenue

The income generated from the sale of goods or services before any costs or expenses are deducted.

Performance Evaluations

Systematic assessments of an employee's job performance, usually including discussions about strengths and areas for improvement.

Organizational Politics

Organizational politics involves the use of power, influence, and networking within an organization to achieve personal or group objectives, sometimes at the expense of others or the organization's goals.

Criterion Contamination

The inclusion of factors irrelevant to job performance in the evaluation process, which can skew performance appraisals.