During March, Pendergraph Corporation incurred $60,000 of actual Manufacturing Overhead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $62,000.The journal entry to record the application of Manufacturing Overhead to Work in Process would include a:
A) credit to Manufacturing Overhead of $62,000
B) debit to Work in Process of $60,000
C) credit to Work in Process of $60,000
D) debit to Manufacturing Overhead of $62,000

Question

Quizplus · Accepted Answer

DThe correct answers are A) credit to Manufacturing Overhead of $62,000 and D) debit to Manufacturing Overhead of $62,000. When manufacturing overhead is applied to work in process, the Manufacturing Overhead account is credited to reflect the amount applied, and the Work in Process account is debited to reflect the increase in costs due to the applied overhead. However, the explanation provided in the choices is slightly misleading because the debit entry for applying manufacturing overhead should actually be to the Work in Process account, not to the Manufacturing Overhead account. The correct journal entry to record the application of manufacturing overhead would be a debit to Work in Process and a credit to Manufacturing Overhead for $62,000.

During March, Pendergraph Corporation Incurred $60,000 of Actual Manufacturing Overhead