Snoozo Moozo manufactures bed frames and mattresses that are custom-made to a person's height and weight. Last week, Stevie Oslow, a bed frame specialist, reported spending 35 hours working on a number of bed frames, including 5 hours overtime. Barry is paid $20 per hour ordinarily, and $30 per hour when working overtime. Which of the following journal entries are most appropriate in accounting for Barry's wages for the 35 hours?
A) Credit Wage Payable $750, Debit WIP $750
B) Credit Wage Payable $750, Debit WIP $700, Debit Manufacturing overhead $50
C) Credit Wage Payable $750, Debit WIP $600, Debit Manufacturing overhead $150
D) Credit Wage Payable $600, Credit other expenses $150, Debit WIP $750

Question

Quizplus · Accepted Answer

Barry's regular wages for 30 hours are $600 (30 hours x $20), and his overtime wages for 5 hours are $150 (5 hours x $30), totaling $750. The regular wages are debited to WIP, and the overtime premium is debited to Manufacturing overhead.

Snoozo Moozo Manufactures Bed Frames and Mattresses That Are Custom-Made