Practice questions:

Minstrel Manufacturing uses a job order costing system. During the month, Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect. Minstrel incurred a factory payroll of $150,000, of which $40,000 was indirect labor. Minstrel uses a predetermined overhead rate of 150% of direct labor cost. The journal entry to record indirect labor cost is:

a.

Debit Factory Overhead $40,000; credit Factory Wages Payable $40,000.

b.

Debit Factory Overhead $40,000; credit Work in Process Inventory $40,000.

c.

Debit Work in Process Inventory $40,000; credit Cash $40,000.

d.

Debit Factory Overhead $110,000; credit Factory Wages Payable $110,000.

e.

Debit Work in Process Inventory $40,000; credit Factory Wages Payable $40,000.