Question

During July, the Jamal Company incurred factory overhead a follows: utilities cost $6,500; accumulated depreciation, $2,500; and indirect salaries, $3,600. Which of the following is correct?
A. Factory Overhead, $12,600 Dr.; Utilities Payable, $6,500 Cr.; Accumulated Depreciation, $2,500 Cr.; Wages Payable, $3,600 Cr.
B. Utilities Expense, $6,500 Dr.; Depreciation Expense, $2,500 Dr.; Wages Expense, $3,600 Dr.; Accounts Payable, $12,600 Cr.
C. Accounts Payable, $12,600 Dr.; Utilities Expense, $6,500 Cr.; Depreciation Expense, $2,500 Cr.; Wages Payable, $3,600 Cr.
D. Work in process, $12,600 Dr.; Utilities Expense, $6,500 Cr.; Accumulated Depreciation, $2,500 Cr.; Wages Payable, $3,600 Cr.

Answer 1

Answer:

A.

Factory Overhead, $12,600 Dr.

Utilities Payable, $6,500 Cr.

Accumulated Depreciation, $2,500 Cr.

Wages Payable, $3,600 Cr.

Explanation:

All the given Expense are classified as the factor overhead and They are accumulated in a single account of factory overhead. Utilities are classified as factory overhead as it is not directed attributable to a specific single product or department. Depreciation is also considered as an overhead due to its nature of expense. Wages are also treated in the same way. All they expenses are added together to be charged in a single head of Factory overhead by $12,600.