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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Business

Castaneda

25 May, 18:42

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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Eileen · Answer 1

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.