Question

The journal entry to record applying overhead during the production process is: a. Manufacturing Overhead XXX Work In Process XXX b. Finished Goods XXX Manufacturing Overhead XXX c. Manufacturing Overhead XXX Finished Goods XXX d. Work In Process XXX Manufacturing Overhead XXX

Answer 1

Answer:

d. Work in Process                              Dr. XXX

        Manufacturing Overheads                       XXX

Explanation:

Work in process inventory is a current asset. A debit of current asset accounts increase their balance while a credit reduces it.

Manufacturing overheads refer to indirect costs. Examples would include such as gas electricity used in manufacturing process which represents an indirect cost.

In the given case, the journal entry would be:

Work in Process A/C                                            Dr.

     To Manufacturing Overheads

(Being application of manufacturing overheads recorded)

The entry means manufacturing costs i.e indirect costs have been used, transferred and added to cost of work in process.