The journal entry to record the allocation of factory overhead to work in process is: (A) debit Work in Process Inventory and credit Factory Overhead (B) debit Factory Overhead and credit Work in Process Inventory (C) debit Cash and credit Factory Overhead (D) debit Work in Process Inventory and credit Cash

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Business

Rigoberto Stevens

19 July, 06:05

The journal entry to record the allocation of factory overhead to work in process is: (A) debit Work in Process Inventory and credit Factory Overhead (B) debit Factory Overhead and credit Work in Process Inventory (C) debit Cash and credit Factory Overhead (D) debit Work in Process Inventory and credit Cash

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Britney Morrison · Answer 1

(A) debit Work in Process Inventory and credit Factory Overhead

Explanation:

On cost accounting, the debit is the destination of the cost.

And the credit the origin, to record the allocation of factory overhead, the destination is the work in proces, and the origin, the reason of existence of the cost is the factory ovehead which, will be credited.

Same idea applies when posting the materials used and the direct labor. A debit to work in process (destination) is made and then, a credit to raw materials inventory (origin) or labor payable (origin)