Question

The following costs were incurred to complete 3 jobs during the year Direct materials Direct labour Job Al $2384 $4278 Job G1 $1272 $3351 Job A2 $3032 $2996 In addition, the supervisor's salary (who is responsible for monitoring the whole 3rd and 4th floors of the factory) is $82961. The journal entries for the year will include which of the following: Select one: a. A debit to work in process of $0 for the direct materials used and a debit to manufacturing overhead for $82961 for indirect labour costs incurred. b. A debit to work in process of $6688 for the direct materials used and a credit to manufacturing overhead of 582961 for indirect labour costs incurred. c. A debit to work in process of $6688 for the direct materials used and a debit to manufacturing overhead of 582961 for indirect labour costs incurred. d. A credit to work in process of $10625 for the direct labour costs incurred and a debit to manufacturing overhead of $82961 for indirect labour costs incurred.

Please show all steps so I can fully understand how to solve. thank you

Answer 1

Solution:

c. Debit to WIP of $6688 to Direct material used and Debit Manufacturing Overhead of $82961 for Indirect labour cost incurred

Entry for recording Direct material used:

Work in progress inventory $6688

To Raw Material inventory $6688

(being entry passed for direct materials used)

Entry for recording Indirect labor cost incurred :

Manufacturing Overhead $82961

To Factory Payroll $82961

( Being entry passed for recording supervisors salary/Indirect labor)