Minstrel Manufacturing Uses a Job Order Costing System

Multiple Choice

Minstrel Manufacturing uses a job order costing system. During one 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 the payment of the factory payroll is:

A) Debit Work in Process Inventory $110,000; credit Cash $150,000.
B) Debit Factory Overhead $40,000; credit Factory Wages Payable $40,000.
C) Debit Work in Process Inventory $150,000; credit Factory Wages Payable $150,000.
D) Debit Work in Process Inventory $150,000; credit Cash $150,000.
E) Debit Factory Wages Payable $150,000; credit Cash $150,000.