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Refer to the exhibit.
WS operates an integrated accounting system. Transactions relating to production overheads for the month of May were as follows:
Indirect Material costs were $15,000
Indirect Labour Costs were $45,000
Production overheads of $58,000 were incurred during the period.
Depreciation of factory machinery amounted to $32,000.
Overheads costs absorbed by production using a standard absorption rate was $164,000 for the period.
What are the correct entries to record the absorption of production overheads for the period?
The correct set of entries to record the absorption of production overheads for the period is:
Suggested Answer: B, C, E
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30 comments · newest first
BE
Benton
11 months ago
I’m not sure about those entries, feels off to me.
JA
Jani
11 months ago
Overheads absorbed were $164k, right? Seems high!
MA
Mammie
11 months ago
Wait, how does depreciation fit into the absorption rate?
DA
Danica
12 months ago
Totally agree, those numbers are key for overhead calculations!
OD
Odette
12 months ago
Indirect materials were $15k, indirect labor $45k.
WI
Willis
12 months ago
I feel like I should know this, but I can't recall if we need to adjust for any variances in the overhead absorption.
LI
Lindsey
1 year ago
This reminds me of a similar practice question where we had to calculate total overheads. I hope I can remember the correct entries for this one!
AL
Alva
1 year ago
I think the absorption of production overheads should include all the indirect costs, but I'm confused about how depreciation fits into the entries.
KA
Kallie
1 year ago
I remember we practiced a question about overhead absorption rates, but I'm not sure how to apply it here with the different costs listed.
ER
Erin
1 year ago
I feel pretty good about this question. The information is laid out clearly, and I just need to apply the principles of absorption costing to determine the proper accounting entries.
GL
Glory
1 year ago
This is a tricky one. I'm not totally confident I know the right approach, but I'll give it my best shot and try to eliminate the incorrect options.
MA
Maryann
1 year ago
Okay, I think I've got a handle on this. The key is to match the actual overhead costs incurred with the overhead costs absorbed into production. I'll walk through the numbers step-by-step.
MA
Matilda
1 year ago
Hmm, I'm a bit unsure about this one. There are a lot of numbers to keep track of. I'll need to take my time and make sure I understand how the production overheads are being absorbed.
ER
Erasmo
1 year ago
This looks like a straightforward question on absorption costing. I'll need to carefully review the information provided and think through the correct accounting entries.
HE
Heike
1 year ago
I bet the answer is hidden in the 'Refer to the exhibit' part. Maybe we need to draw some fancy diagrams or something? *scratches head*
MA
Malcom
1 year ago
B) B
LE
Lenna
1 year ago
I think it's A too.
RO
Rory
1 year ago
A) A
BU
Bulah
1 year ago
Alright, time to put on my thinking cap. I'm going to go with option C, but let's see if the others have a better idea.
CH
Chauncey
1 year ago
I agree with you, option C seems to be the most suitable.
SA
Salley
1 year ago
I believe option B is the right choice.
LA
Lai
1 year ago
I think option A might be the correct entry.
MO
Monroe
2 years ago
Wait, wait, wait. Did they really just give us a question about an 'integrated accounting system'? What is this, a test for accountants? *chuckles*
LA
Lauran
1 year ago
User 2
DO
Dortha
1 year ago
User 1
AM
Amie
2 years ago
Hmm, I'm not sure. The numbers seem a bit confusing, but I'm leaning towards option B. Someone help me out here!
AN
An
2 years ago
Okay, let's see. We have all the relevant information about the production overheads, so I think option D looks like the correct answer.
YO
Yolando
2 years ago
That makes sense, I didn't consider the depreciation. Option C might be the correct choice after all.
TE
Tequila
2 years ago
I disagree, I believe the correct entries are in option C because of the depreciation of factory machinery.
YO
Yolando
2 years ago
I think the correct entries to record the absorption of production overheads for the period is option A.