Question

Price Company assigns overhead based on machine hours. The Milling Department logs 1,800 machine hours and Cutting Department shows 3,000 machine hours for the period. If the overhead rate is $5 per machine hour, the entry to assign overhead will show a:___________
a. debit to Manufacturing Overhead for $24,000.
b. credit to Work in ProcessCutting Department for $15,000.
c. debit to Work in Process for $15,000.
d. credit to Manufacturing Overhead for $24,000.

Answer 1

Answer:

d. credit to Manufacturing Overhead for $24,000.

Explanation:

Applied Manufacturing overhead = ( 1,800+3000) x $5 = $24,000

So, The journal entry to record this will be,

                                               Dr.          Cr.

Work in Process of            $24,000

Manufacturing Overhead                 $24,000

So, manufacturing overhead account is credited with the value of $24,000.