Question
A manufacturer estimates total factory overhead costs of $4,704,000 and total direct labor costs of $2,240,000 for its first year of operations. During January, the
A manufacturer estimates total factory overhead costs of $4,704,000 and total direct labor costs of $2,240,000 for its first year of operations. During January, the company used $110,000 of direct labor cost in its Blending department and $70,000 of direct labor cost in its Bottling department. The company computes its predetermined overhead rate as a percentage of direct labor cost. Which of the following is the correct journal entry to apply factory overhead to the Blending and Bottling departments.
(A) Debit Work in Process InventoryBlending $231,000; debit Work in Process InventoryBottling $147,000; credit Factory Wages Payable $378,000.
(B) Debit Work in Process InventoryBlending $110,000; debit Work in Process InventoryBottling $70,000; credit Factory Overhead $180,000.
(C) Debit Work in Process Inventory $378,000; credit Factory Overhead $378,000.
(D) Debit Work in Process Inventory $180,000; credit Factory Overhead $180,000.
(E) Debit Work in Process InventoryBlending $231,000; debit Work in Process InventoryBottling $147,000; credit Factory Overhead $378,000.
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