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1 December, 18:39

During the first quarter, Francum Company incurs the following direct labor costs: January $50,800, February $58,000, and March $65,200. For each month, prepare the entry to assign overhead to production using a predetermined rate of 73% of direct labor cost.

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  1. 1 December, 19:45
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    work in process inventory 37,084 debit

    manufactory overhead 37,084 credit

    work in process inventory 42,340 debit

    manufactury overhead 42,340 credit

    work in process inventory 47,596 debit

    manufactory overhead 47,596 credit

    Explanation:

    We calculate the applied overhead per month:

    50800 x 73% = 37,084

    58,000 x 73% = 42,340

    65,200 x 73% = 47,596‬

    the journal entry will be a debit to WIP and a credit to manufacturing overhead which latter will be compare with the actual overehad to solve for under or over-applied overhead.
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