Question

Penn Company uses a job order cost accounting system. In the last month, the system accumulated labor time tickets totaling $33,500 for direct labor and $6,700 for indirect labor. These costs were accumulated in Factory Payroll as they were paid. Which entry should Penn make to assign the Factory Payroll

Answer 1

Answer:

The entry should Penn make would be as follows:

                                                  Debit     Credit

Goods in process inventory   $33,500

factory overhead                      $6,700

Factory Payroll                                        $40,200

Explanation:

To make the preparation of the entry should Penn make to assign the Factory Payroll we would have to calculate the factory payroll as follow:

Factory Payroll=Goods in process inventory+factory overhead

Factory Payroll=$33,500+$6,700

Factory Payroll=$40,200

Therefore, the entry should Penn make would be as follows:

                                                  Debit     Credit

Goods in process inventory   $33,500

factory overhead                      $6,700

Factory Payroll                                        $40,200