If Department T uses $89,000 of direct labor and Department V uses $11,000 of direct labor,the following journal entry would be recorded by the process cost accounting system:
$\begin{array}{llr}
\text { Goods in Process Inventory, Department T} &89,000\
\text {Goods in Process Inventory, Department V } &11,000\
\text { Factory Overhead} &&100,000
\end{array}$

Question

If Department T uses $89,000 of direct labor and Department V uses $11,000 of direct labor,the following journal entry would be recorded by the process cost accounting system:
 $\begin{array}{llr}
  \text { Goods in Process Inventory, Department T} &89,000\
 \text {Goods in Process Inventory, Department  V  } &11,000\
 \text {  Factory Overhead} &&100,000
\end{array}$

Quizplus · Accepted Answer

The journal entry incorrectly debits Factory Overhead instead of crediting it. The correct entry should debit Goods in Process Inventory for both departments and credit Factory Overhead for the total direct labor cost.

If Department T Uses $89,000 of Direct Labor and Department