Question

EB10.

LO 5.5Overhead is assigned to the manufacturing department at the rate of $5 per machine hour. There were 3,000 machine hours used in the molding department. Prepare the journal entry to apply overhead to the manufacturing department.

Answer 1

Debit Credit

Work in process inventory $15,000

Manufacturing overhead clearing account $15,000

Step-by-step explanation:

First determine the amount of applied overhead which can be calculated as follows

Applied overhead=Rate per machine hour*number of hours

Applied overhead=$5*3,000=$15,000

The journal entry for the applied overhead shall be made as follow

Debit Credit

Work in process inventory $15,000

Manufacturing overheads clearing account $15,000