Question

Markley Manufacturing calculated its predetermined overhead rate to be 120% of direct labor cost. During June, the company incurred $90,000 of factory labor costs, of which $85,000 is direct labor and $5,000 is indirect labor. Actual overhead incurred was $84,000. How much will Markley debit Work in Process Inventory in June

Answer 1

$102,000

Step-by-step explanation:

Calculation for How much will Markley debit Work in Process in June

Using this formula

Debit Work in Process =Direct labor* Direct labor predetermined overhead rate percentage

Let plug in the formula

Debit Work in Process=$85,000 *120%

Debit Work in Process=$102,000

Therefore Markley debit Work in Process in June will be $102,000