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Question: If direct labor for the month is $40,000 overhead is applied based on direct labor, annual overhead is $600,000, and annual direct labor is $1,000,000, what is the entry to charge direct labor to production? a. Debit Work-in-Process Inventory $40,000; credit Payroll $40,000 b. Debit Overhead-Applied $40,000; credit Work in Process $40,000 c. Debit Work-in-Process Inventory $24,000; credit Overhead-Applied $24,000 d. Debit Work-in-Process Inventory $66,000; credit Overhead-Applied $66,000

Question: If direct labor for the month is $40,000 overhead is applied based on direct labor, annual overhead is $600,000, and annual direct labor is $1,000,000, what is the entry to charge direct labor to production? a. Debit Work-in-Process Inventory $40,000; credit Payroll $40,000 b. Debit Overhead-Applied $40,000; credit Work in Process $40,000 c. Debit Work-in-Process Inventory $24,000; credit Overhead-Applied $24,000 d. Debit Work-in-Process Inventory $66,000; credit Overhead-Applied $66,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question: If direct labor for the month is $40,000 overhead is applied based on direct labor, annual overhead is $600,000, and annual direct labor is $1,000,000, what is the entry to charge direct labor to production? a. Debit Work-in-Process Inventory $40,000; credit Payroll $40,000 b. Debit Overhead-Applied $40,000; credit Work in Process $40,000 c. Debit Work-in-Process Inventory $24,000; credit Overhead-Applied $24,000 d. Debit Work-in-Process Inventory $66,000; credit Overhead-Applied $66,000
Transcribed Image Text:Question: If direct labor for the month is $40,000 overhead is applied based on direct labor, annual overhead is $600,000, and annual direct labor is $1,000,000, what is the entry to charge direct labor to production? a. Debit Work-in-Process Inventory $40,000; credit Payroll $40,000 b. Debit Overhead-Applied $40,000; credit Work in Process $40,000 c. Debit Work-in-Process Inventory $24,000; credit Overhead-Applied $24,000 d. Debit Work-in-Process Inventory $66,000; credit Overhead-Applied $66,000
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