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Which of the following journal entries is used to record actual *variable* overhead costs *incurred*?

A) Accounts Payable
Variable Overhead Control
B) Variable Overhead Control
Accounts Receivable
C) Work-in-Process Control
Variable Overhead Control
D) Variable Overhead Control
Accounts Payable

User Pangpang
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1 Answer

3 votes

Final answer:

The correct journal entry to record actual variable overhead costs incurred is a debit to Variable Overhead Control and a credit to Accounts Payable, reflecting an increase in expenses and the creation of a liability.

Step-by-step explanation:

When recording actual variable overhead costs incurred, it is necessary to increase the expense and also represent the obligation to pay. The correct journal entry to record these costs would be as follows:

Debit: Variable Overhead Control
Credit: Accounts Payable

This entry means that the company is increasing its overhead expenses (debit to Variable Overhead Control) and recognizing a liability (credit to Accounts Payable) since these costs often entail future cash outflows to vendors or suppliers for services or goods received. Expenses like raw materials and labor, which are common types of variable costs, would fit into this accounting treatment.

Therefore, the correct option is D) Variable Overhead Control Accounts Payable.

User Preetika Kaur
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