During March, Pendergraph Corporation incurred $61,000 of actual Manufacturing Overhead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $63,000.The journal entry to record the application of Manufacturing Overhead to Work in Process would include a:
A) credit to Manufacturing Overhead of $63,000
B) debit to Work in Process of $61,000
C) credit to Work in Process of $61,000
D) debit to Manufacturing Overhead of $63,000

Question

Quizplus · Accepted Answer

DThe correct answers are A) credit to Manufacturing Overhead of $63,000 and D) debit to Manufacturing Overhead of $63,000. When manufacturing overhead is applied to work in process, the journal entry includes a debit to Work in Process (reflecting the increase in costs due to overhead) and a credit to Manufacturing Overhead (reflecting the allocation of overhead costs to production). The amounts are based on the applied overhead, not the actual overhead incurred.

During March, Pendergraph Corporation Incurred $61,000 of Actual Manufacturing Overhead