Question

Sherwood, Inc. allocates overhead based on machine hours using an overhead rate of $8.40 per machine hour. Sherwood has two

departments, the Blending Department and the Packaging Department. The Blending Department logs 3,000 machine hours and the
Packaging Department shows 5,600 machine hours for the period. The entry to allocate overhead should include a
O debit to Manufacturing Overhead for $72,240.
O credit to Manufacturing Overhead for $72,240.
O credit to Work in Process-Blending for $47,040.
O debit to Work in Process-Packaging for $25,200.

Answer 1

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.