Question

Which of the following entries would be made to record $20,800 of labor-80% of which is direct, and 20% of which is indirect-to jobs?

A. Work in Process Inventory 20,800
Wages Payable 20,800
B. Manufacturing Overhead 20,800
Manufacturing Wages 20,800
C. Work in Process Inventory 16,640
Manufacturing Overhead 4,160
Wages Payable 20,800
D. Wages Payable 20,800
16,640
WIP Inventory
Manufacturing Inventory 4,160

Answer 1

Option C

Step-by-step explanation:

Entry: DEBIT CREDIT

Work in Process Inventory 16,640

Manufacturing Overhead(w) 4,160

Wages Payable 20,800

Working: Manufacturing Overhead = 20,800 x 40% = $4,160

Note: In order to find out the work in progress and manufacturing Overhead we will consider sum of all direct cost as Work in progress and allocate the sum of indirect to Manufacturing Overheads.