1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Vesnalui [34]
3 years ago
15

During the current month, a company that uses job order costing incurred a monthly factory payroll of $180,000. Of this amount,

$40,000 is classified as indirect labor and the remainder as direct. Prepare journal entries to record these transactions.
Business
2 answers:
Likurg_2 [28]3 years ago
8 0

Answer:

The necessary journal entries are:

Dr Factory work-in progress     $140,000

Dr Factory Overhead account   $40,000

Cr Factory wages payable                        $180,000

Explanation:

The $40,000 is an cost of labor, hence it is debited to factory overhead which is the account for indirect labor cost. Indirect labor in this sense refers to labor cost not directly traceable to the finished goods produced,the remaining balance of $140,000($180,000-$40,000) is debited to factory work in progress.

For every debit, there is corresponding credit,hence the entire $180,000 is credit to factory wages payable account pending when payment is made. Upon payment the account debited and a credit posted to cash account to indicate cash outflow.

shutvik [7]3 years ago
5 0

Answer:

Work in Process (Dr.)                     $140,000

Manufacturing overhead (Dr.)           40,000

                     Payroll / Salaries Payable                $180,000

Explanation:

Job order costing is a costing method used by the managerial accountants when the company produces different products and these products are not identical in-nature. An alternative to this method is Process costing which is used when a company produces homogenous products. In this case, the company has adopted job order costing because its products can be hetrogenous in-nature. Moreover, the company has incurred a Payroll cost of $180,000. $40,000 out of this amount is classified as indirect labor because the company is not able to trace it to a particular job and it will be treated as manufacturing overhead. This amount could have been paid to supervisors of factory or maintenance workers. The remaining amount of $140,000 is classified as direct labor because the management is in a better position to trace it to a particular job. This amount directly goes to Work-in-Process account.

You might have noticed that the indirect cost is kept in Manufacturing overhead account, whereas the direct labor cost is charged to Work-in-process account. This is because that at the start of a period, the management estimates the amount of manufacturing overhead (Indirect costs) and charge it to the work-in-process account. As the period goes on, the indirect costs are recorded in manufacturing overhead account when incurred, and at the end of period we compare the Actual manufacturing overhead with the expected (charged to Work-in-process) and make adjustments.

Thanks!

You might be interested in
What is the ongoing set of competitive actions and competitive responses that occur among firms as they maneuver for an advantag
finlep [7]

The ongoing set of competitive actions and competitive responses that occur among firms as they maneuver for an advantageous market position  is called competitive rivalry.

Aggressive competition is the continued set of aggressive moves and competitive responses that occur amongst corporations as they maneuver for an nice market position. competitors are firms running in the equal market, supplying similar merchandise, and concentrated on similar customers.

Creates a positive picture of your emblem or product: Positioning in advertising lets in you to influence how others view your product. in case you create materials that show the product in a effective light, customers may partner you this, that may result in extra purchases.

Learn more about advantageous market position here:-brainly.com/question/15530466

#SPJ4

5 0
2 years ago
For purposes of computing the WACC, if the book value of equity exceeds the market value of equity, then: the market value of eq
vagabundo [1.1K]

Answer:

The market value of equity should be used.

Explanation:

Their are only two methods which are book value method or market value method. The market value method is preferred because the reason is that the market value gives the more accurate numerical value that the securities of the company will give which is the required rate of return to its investors. However historic cost data is not useful because the value of stock and bonds keeps changing every second in the stock exchange and their is the risk that the WACC calculated is inaccurate which implies that the project appraised is also incorrect.

So the best way to calculate the weighted cost of capital is that we should use the fair value of the securities.

5 0
3 years ago
Read 2 more answers
Controlling the money supply to achieve desired macroeconomic goals is called
Sergio [31]

Answer:

The answer is monetary policy

Explanation:

Monetary policy is an economic policy that manages the size and growth rate of the money supply in an economy. It is a powerful tool to regulate macroeconomic variables such as inflation, consumption, growth and liquidity.

3 0
3 years ago
What is my country name? nepal<br>Follow me formore points​
Assoli18 [71]

Answer:

ohhh really I am also from Nepal

Namaste timi Santa bolerw ramro lagyo dhanyabaad!

3 0
3 years ago
Read 2 more answers
Young Company budgets sales of $970,000, fixed costs of $30,600, and variable costs of $135,800. What is the contribution margin
jarptica [38.1K]

Answer:

contribution margin ratio= 0.86

Explanation:

Giving the following information:

Young Company budgets sales of $970,000

Variable costs of $135,800.

<u>To calculate the contribution margin ratio, we need to use the following formula:</u>

contribution margin ratio= contribution margin / sales

contribution margin ratio= (970,000 - 135,800) / 970,000

contribution margin ratio= 0.86

3 0
3 years ago
Other questions:
  • And currency risks are to key country success factors as land costs and​ ________ are to key region success factors.
    11·1 answer
  • During the period, labor costs incurred on account amounted to $175,000, including $150,000 for production orders and $25,000 fo
    10·1 answer
  • Assume that you are the sales manager of a soap-manufacturing company. Your supervisor has asked you to present the sales data o
    9·1 answer
  • On November 1, 2021, NoleCo signed a $100,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six
    14·1 answer
  • "A retail store owner offers a discount on product A and predicts that the customers would purchase products B and C in addition
    6·1 answer
  • Consider Paul's decision to go to college. If he goes to college, he will spend $90,000 on tuition, $15,000 on room and board, a
    15·1 answer
  • When demand is inelastic and price is decreased:
    15·1 answer
  • which of the following statements is true? Short-term bonds have greater interest rate risk than do long-term bonds. Long-term b
    13·1 answer
  • Mest Company has 9 employees. FICA Social Security taxes are 6.2% of the first $118,500 paid to each employee, and FICA Medicare
    13·1 answer
  • What is the entry qulification for B.Sc. in agriculturel.​
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!