For Wilton Company the predetermined overhead rate is 70% of direct labor cost.During the month $720000 of Factory Labor was incurred of which $200000 is indirect labor.Actual overhead incurred was $360000.The amount of overhead added to Work in Process Inventory should be:
A)$364000
B)$360000
C)$504000
D)$520000

Question

Quizplus · Accepted Answer

Overhead added to Work in Process Inventory = (Direct labor cost * Predetermined overhead rate)= ($720,000 - $200,000) * 70%= $520,000 * 70%= $364,000

For Wilton Company the Predetermined Overhead Rate Is 70% of Direct