Overhead costs that are classified as product costs are added to direct labor costs and direct material
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Overhead costs that are classified as product costs are added to direct labor costs and direct material costs to find the total cost that is added to the Inventory account. If Scarpa Shoe Company incurred
$480,000 of production overhead costs in the year 2012, these costs would be added to inventory by this journal entry:
Dr. . . . . . . . . . . . . . . . . . . . . . . 480,000 Cr. Various overhead accounts . . . . . . . . . . . . . . . . . . . . 480,000
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Jehal Shah
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