Penn Company uses a job order cost accounting system.In the last month,the system accumulated labor time tickets totaling $24,600 for direct labor and $4,300 for indirect labor.These costs were accumulated in Factory Payroll as they were paid.Which entry should Penn make to assign the Factory Payroll?
(A)
$\begin{array}{llr}
\text { Payroll Expense } &28,900\
\text { Cash} &&28,900\
\end{array}$

(B)
$\begin{array}{lr}
\text { Payroll Expense } & 24,600 \
\text { Factory Overhead } & 4,300 \
\text { Factorv Pavroll } &&28,900
\end{array}$

(C)
$\begin{array}{lr}
\text { Goods in Process Inventory } & 24,600 \
\text { Factory Overhead } & 4,300 \
\text { Factory Payroll }&&28,900
\end{array}$

(D)
$\begin{array}{l}
\text { Goods in Process Inventory } & 24,600 \
\text { Factory Overhead } & 4,300\
\text { Accmied Wages Pavable }&&28,900
\end{array}$

(E)
$\begin{array}{llr}
\text {Goods in Process Inventory } &28,900\
\text { Factory Payroll } &&28,900\
\end{array}$

A) A
B) B
C) C
D) D
E) E

Question

Penn Company uses a job order cost accounting system.In the last month,the system accumulated labor time tickets totaling $24,600 for direct labor and $4,300 for indirect labor.These costs were accumulated in Factory Payroll as they were paid.Which entry should Penn make to assign the Factory Payroll?
(A)
$\begin{array}{llr}
  \text { Payroll Expense } &28,900\
 \text {  Cash} &&28,900\
\end{array}$

(B) 
$\begin{array}{lr}
\text { Payroll Expense } & 24,600 \
\text { Factory Overhead } & 4,300 \
\text { Factorv Pavroll } &&28,900
\end{array}$

(C) 
$\begin{array}{lr}
\text { Goods in Process Inventory } & 24,600 \
 \text { Factory Overhead } & 4,300 \
\text { Factory Payroll }&&28,900
\end{array}$

(D) 
$\begin{array}{l}
\text { Goods in Process Inventory } & 24,600 \
\text { Factory Overhead } & 4,300\
\text { Accmied Wages Pavable }&&28,900
\end{array}$

(E) 
$\begin{array}{llr}
  \text {Goods in Process Inventory  } &28,900\
 \text {  Factory Payroll } &&28,900\
\end{array}$

A) A
B) B
C) C
D) D
E) E

Quizplus · Accepted Answer

The entry to assign Factory Payroll should debit Factory Labor for the total direct labor cost ($24,600) and debit Factory Overhead for the total indirect labor cost ($4,300), for a total debit of $28,900. The credit should be to Payroll (or Cash, depending on whether the payroll was paid in cash or not) for the same amount of $28,900. Choice C is the only one that correctly reflects this entry. The other choices either do not include both the direct and indirect labor costs or incorrectly credit Factory Overhead instead of debiting it.

Penn Company Uses a Job Order Cost Accounting System Payroll Expense 28,900 Cash28,900\begin{array}{llr} \text { Payroll Expense } &28,900\\ \text { Cash} &&28,900\\\end{array} Payroll Expense Cash​28,900​28,900​

Penn Company Uses a Job Order Cost Accounting System $\begin{array}{llr} \text { Payroll Expense } &28,900\\ \text { Cash} &&28,900\\\end{array}$