Question

Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for direct labor usage is:Direct materials used $87,000Direct labor used 160,000Predetermined overhead rate (based on direct labor)155%Goods transferred to finished goods 432,000Cost of goods sold 444,000Credit sales 810,000a. Debit Factory Payroll Payable $160,000; credit Cash $160,000.b. Debit Work in Process Inventory $160,000; credit Factory Payroll Payable $160,000.c. Debit Cost of Goods Sold $160,000; credit Factory Payroll Payable $160,000.d. Debit Work in Process Inventory $160,000; credit Raw Materials Inventory $160,000.e. Debit Work in Process Inventory $160,000; credit Cash $160,000.

Answer 1

b. Debit Work in Process Inventory $160,000; credit Factory Payroll Payable $160,000.

Step-by-step explanation:

In order to record the cost of goods manufactured, once the goods are finished, you add up all the work in process debits. The following journal entry would be:

Dr Finished goods inventory

Cr Work in process inventory (all added up)

In this case, since you are recording labor usage, you must also credit wages or payroll payable (that correspond to the amount of labor used to manufacture the goods).