Question

Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for overhead allocation is:

Direct materials used $87,000
Direct labor used 160,000
Predetermined overhead rate (based on direct labor) 155%
Goods transferred to finished goods 432,000
Cost of goods sold 444,000
Credit sales 810,000

a. Debit Factory Overhead $248,000; credit Cash $248,000.
b. Debit Work in Process Inventory $160,000; credit Factory Payroll $160,000.
c. Debit Work in Process Inventory $248,000; credit Factory Overhead $248,000.
d. Debit Work in Process Inventory $160,000; credit Factory Overhead $160,000.
e. Debit Work in Process Inventory $160,000; credit Cash $160,000.

Answer 1

c. Debit Work in Process Inventory $248,000; credit Factory Overhead $248,000.

Step-by-step explanation:

The journal entry to record the overhead allocation is given below:

Work in Process Inventory $248,000 ($160,000 × 155%)

To Factory Overhead $248,000.

(being the overhead allocation is recorded)

here the work in process inventory is debited as it increased the asset and the factory overhead is credited so that the allocation of the overhead could be cone

Therefore the third option is correct