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 $ 89,000
Direct labor used 162,000
Predetermined overhead rate (based on direct labor) 157 %
Goods transferred to finished goods 434,000
Cost of goods sold 446,000
Credit sales 830,000
1. Debit Work in Process Inventory $251,160; credit Factory Overhead $251,160.
2. Debit Work in Process Inventory $161,000; credit Factory Wages $161,000.
3. Debit Work in Process Inventory $161,000; credit Cash $161,000.
4. Debit Work in Process Inventory $161,000; credit Factory Overhead $161,000.

Answer 1

Amount of Factory Overhead = 254,340

Step-by-step explanation:

Computation of overhead:

Amount of Factory Overhead = 157% of Direct labor used

Amount of Factory Overhead = 157% (162,000)

Amount of Factory Overhead = 254,340

Journal entry.

Account title and explanation Debit Credit

Work in Process Inventory $254,340

Factory Overhead $254,340