Question
A manufacturer estimates total factory overhead costs of $5,175,000 and total direct labor costs of $2,250,000 for its first year of operations. During January, the
A manufacturer estimates total factory overhead costs of $5,175,000 and total direct labor costs of $2,250,000 for its first year of operations. During January, the company used $110,000 of direct labor cost in its Blending department and $80,000 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.
O Debit Work in Process Inventory-Blending $253,000; debit Work in Process Inventory-Bottling $184,000; credit Factory Overhead $437,000.
O Debit Work in Process Inventory $437,000; credit Factory Overhead $437,000.
O Debit Work in Process Inventory-Blending $253,000; debit Work in Process Inventory-Bottling $184,000; credit Factory Wages Payable $437,000.
O Debit Work in Process Inventory-Blending $110,000; debit Work in Process Inventory-Bottling $80,000; credit Factory Overhead $190,000.
O Debit Work in Process Inventory $190,000; credit Factory Overhead $190,000.
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