Explanation:
The process cost shows the summary of the activities related to the production. It includes the cost of goods completed & transferred units and the ending work in process inventory.
So, the given statement is true
The indirect cost are come under the manufacturing overhead cost. So, it would be charged to overhead control account
Thus, the given statement is false.
The direct labor includes that labor which is directly related to the production process of a product. So the single production department is likely to be a direct labor
Thus, the given statement is true.
To record the allocation of overhead, the following journal entry is required
Work in Process Inventory, Baking Dept A/c Dr $24,500
To Factory overhead A/c $24,500
(Being the overhead allocation is recorded)
The computation is shown below:
= Direct labor cost × allocation rate
= $10,000 × 245%
= $24,500
Thus, the given statement is true.
