Question

Labor costs associated with accounting personnel need to be recorded. Which of the following entries would be used to record this event?

Group of answer choices

debit Work in process inventory; credit Wages payable

debit Cost of goods sold; credit Wages payable

debit Manufacturing overhead; credit Wages payable

debit Wages expense; credit Wages payable

Indirect materials are placed in production. Which of the following entries would be used to record this event?

Group of answer choices

debit Manufacturing overhead; credit Raw materials inventory

debit Raw materials inventory; credit Work in process inventory

debit Raw materials inventory; credit Manufacturing overhead

debit Work in process inventory; credit Raw materials inventory

Flex Company applies manufacturing overhead using a normal costing approach. The predetermined overhead rate for Flex Company is $15 per direct labor hour. Estimated direct labor hours for the year totaled 100,000 and actual direct labor hours for the year totaled 110,000. Actual overhead costs for the year totaled $1,400,000. How much in overhead costs were applied to products for the year?

Group of answer choices

$2,100,000

$1,650,000

$1,500,000

$1,400,000

Answer 1

Question:

Labor costs associated with accounting personnel need to be recorded. Which of the following entries would be used to record this event.

Answer: Since the accounting personnel labor cost is not part of the production, it will not form part of the manufacturing cost. Hence this labor cost will form part of Administrative cost.

Journal entry to record the transaction is:

debit Wages expense; credit Wages payable

If it is assumed that it will form part of the production process, then it will form part of manufacturing cost. Hence the entry will be, debit Work in process inventory; credit Wages payable

Question:

Indirect materials are placed in production. Which of the following entries would be used to record this event?

Answer: These indirect materials will not form part of the prime cost, it will go as an overhead cost. Hence it will not be considered in the Work-in-Process inventory. It will go through the Manufacturing overhead cost.

Therefore, the entry to record indirect materials is:

debit Manufacturing overhead; credit Raw materials inventory

Question:

Flex Company applies manufacturing overhead using a normal costing approach. The predetermined overhead rate for Flex Company is $15 per direct labor hour. Estimated direct labor hours for the year totaled 100,000 and actual direct labor hours for the year totaled 110,000. Actual overhead costs for the year totaled $1,400,000. How much in overhead costs were applied to products for the year?

Actual direct labor hours = 110,000

predetermined overhead rate = $15 per direct labor hour

Applied overheads = Actual direct labor hours x predetermined overhead rate = 110,000 x $15 = $$1,650,000

Correct answer is $1,650,000