Portside Watercraft Uses a Job Order Costing System

question 5

Multiple Choice

Portside Watercraft uses a job order costing system.During one month Portside purchased $153,000 of raw materials on credit; issued materials to production of $164,000,of which $24,000 were indirect.Portside incurred a factory payroll cost of $95,000,of which $25,000 was indirect labor.Portside uses a predetermined overhead rate of 170% of direct labor cost.
-The journal entry to record the application of factory overhead to production is:

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

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Definitions:

Accounts Receivable

Represents money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Year-End Balance

The financial status of an account at the close of an accounting year, indicating the net value after all transactions.

Inventory Turnover

A measure of how frequently a company sells and replaces its stock of goods during a certain period of time.

Inventory Balance

The quantity of goods or materials on hand at any given time within a business.