Question

Altima, Inc. finished Job A40 on the last working day of the year. It utilized $ 360 of direct materials and $ 2 comma 030 of direct labor. Altima uses a predetermined overhead allocation rate based on direct labor​ costs, which has been fixed at​ 40%. The entry to record the completion of the job should involve a​ ________. A. debit to Finished Goods Inventory $ 3 comma 202 and a credit to Materials Inventory $ 3 comma 202 B. debit to Cost of Goods Sold $ 3 comma 202 and a credit to Finished Goods Inventory $ 3 comma 202 C. debit to Finished Goods Inventory $ 3 comma 202 and a credit to WorkminusinminusProcess Inventory $ 3 comma 202 D. debit to WorkminusinminusProcess Inventory $ 3 comma 202 and a credit to Finished Goods Inventory $ 3 comma 202

Answer 1

Answer:

C. debit to Finished Goods Inventory $ 3 comma 202 and a credit to Work minus Process Inventory $ 3 comma 202

Explanation:

The journal entry is shown below:

Finished goods inventory A/c Dr $3,202

             To Work in process inventory A/c $3,202

(Being the job is completed)

The computation is shown below:

= Direct material cost + Direct labor cost + manufacturing overhead cost

= $360 + $2,030  + $2,030 × 40%

= $360 + $2,030 + $812

= $3,202