If the predetermined overhead allocation rate is 350% of direct labor cost and the Painting Department's direct labor cost for the reporting period is $20,000, the following entry would record the allocation of overhead to the products processed in this department:

Question

Quizplus · Accepted Answer

To calculate the overhead allocation, multiply the direct labor cost by the predetermined overhead allocation rate: $20,000 x 350% = $70,000. This $70,000 amount would then be allocated as overhead to the products processed in the Painting Department.

If the Predetermined Overhead Allocation Rate Is 350% of Direct