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Gerald Eiche Company Uses a Job-Order Costing System and Has

Question 36

Multiple Choice

Gerald Eiche Company uses a job-order costing system and has the following data available:
 Beginning Direct Materials Inventory $26,000 Beginning Work-In-Process Inventory $64,000 Beginning Finished Goods Inventory $58,000Direct materials purchased on account $148,000 Direct materials requisitioned$82,000Direct labor cost incurred $130,000Factory overhead incurred $146,000Cost of goods completed $292,000Cost of Goods Sold $260,000 Overhead application rate (based on direct labor cost) 125%\begin{array}{ll}\text { Beginning Direct Materials Inventory } & \$ 26,000 \\\text { Beginning Work-In-Process Inventory } & \$ 64,000 \\\text { Beginning Finished Goods Inventory } & \$ 58,000\\ \text {Direct materials purchased on account }&\$148,000 \\ \text { Direct materials requisitioned}&\$82,000 \\ \text {Direct labor cost incurred }&\$130,000 \\ \text {Factory overhead incurred }&\$ 146,000\\ \text {Cost of goods completed }&\$292,000 \\ \text {Cost of Goods Sold }&\$ 260,000\\ \text { Overhead application rate (based on direct labor cost) }&125\%\\\end{array}
The journal entry to record the cost of goods sold would include a ________.


A) Debit to Finished Goods Inventory for $292,000
B) Credit to Finished Goods Inventory for $260,000
C) Credit to Work-In-Process Inventory for $260,000
D) Credit to Cost of Goods Sold for $292,000

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