Final answer:
Sherwood, Inc. allocates overhead based on machine hours using an overhead rate of $8.40 per machine hour. The entry to allocate overhead should include a. debit to Manufacturing Overhead for $72,240.
Step-by-step explanation:
In order to allocate overhead costs based on machine hours, Sherwood, Inc. uses an overhead rate of $8.40 per machine hour. The Blending Department logged 3,000 machine hours, while the Packaging Department logged 5,600 machine hours for the period.
To allocate overhead, the entry should include a debit to Manufacturing Overhead for $72,240. This is because overhead costs are being allocated to both departments based on their respective machine hours.
Therefore, the correct answer is a debit to Manufacturing Overhead for $72,240 and a credit to Work in Process-Blending for $47,040 and a debit to Work in Process-Packaging for $25,200.