Question

During the first quarter, Sheffield Company incurs the following direct labor costs: January $53,700, February $46,100, and March $72,100. For each month, prepare the entry to assign overhead to production using a predetermined rate of 70% of direct labor cost. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Answer 1

Step-by-step explanation:

The journal entries are shown below:

For January month

Work in Progress Inventory A/c Dr $37,590

To Manufacturing Overhead $37,590

(Being assigned overhead recorded)

For February month

Work in Progress Inventory A/c Dr $32,270

To Manufacturing Overhead $32,270

(Being assigned overhead recorded)

For March month

Work in Progress Inventory A/c Dr $50,470

To Manufacturing Overhead $50,470

(Being assigned overhead recorded)

The computation of the assigned overhead is shown below:

= Overhead × predetermined rate

This formula should be used for all three months