Chapter 19, Problem 4QC

When a manufacturing company uses direct labor, it assignsthe cost by debiting
Learning Objective 2

1. Work-in-Process Inventory.
2. Manufacturing Overhead
3. Direct Labor.
4. Wages Payable.

Questions 5, 6, 7, and 8 are based on the following information:

Gell Corporation manufactures computers. Assume that Gell:

• allocates manufacturing overhead based on machine hours
• estimated 12,000 machine hours and $93,000 of manufacturing overhead costs
• actually used 16,000 machine hours and incurred the following actual costs:

Indirect labor	$11,000
Depreciation on plant	48,000
Machinery repair	11,000
Direct labor	75,000
Plant supplies	6,000
Plant utilities	7,000
Advertising	35,000
Sales commissions	27,000