Question

For Sheffield Corp., the predetermined overhead rate is 70% of direct labor cost. During the month, $500000 of factory labor costs are incurred of which $210000 is indirect labor. Actual overhead incurred was $360000. The amount of overhead debited to Work in Process Inventory should be: $360000 $350000 $290000 $203000

Answer 1

Answer:

$203,000

Explanation:

Sheffield corporation has a predetermined overhead rate of 70%

During the month $500,000 of the factory labour cost have $210,000 in indirect labor

Therefore the amount of overhead debited to work in process inventory can be calculated as follows

= $500,000-$210,000 × 70/100

= 290,000 × 0.7

= $203,000