During the month of August, Ross MotorCo applied overhead to jobs using an overhead rate of $0.80 per dollar of direct labor. Direct labor in August was $138,000. Estimated overhead in August was $112,800. Actual overhead was composed of the following items: $$\begin{array} { l r }
\text { Indirect materials } & \$ 16,400 \
\text { Indirect labor } & 24,900 \
\text { Utilities } & 24,500 \
\text { Depreciation } & 38,700 \
\text { Repair expense } & 13,500 \
\text { Total } & \$ 118,000
\end{array}$$ How much will be recorded as a debit to Work in Process for overhead during the year for Ross MotorCo?

Question

During the month of August, Ross MotorCo applied overhead to jobs using an overhead rate of $0.80 per dollar of direct labor. Direct labor in August was $138,000. Estimated overhead in August was $112,800. Actual overhead was composed of the following items: $$\begin{array} { l r } 
\text { Indirect materials } & \$ 16,400 \
\text { Indirect labor } & 24,900 \
\text { Utilities } & 24,500 \
\text { Depreciation } & 38,700 \
\text { Repair expense } & 13,500 \
\text { Total } & \$ 118,000
\end{array}$$ How much will be recorded as a debit to Work in Process for overhead during the year for Ross MotorCo?

Quizplus · Accepted Answer

The overhead applied to Work in Process is calculated by multiplying the overhead rate by the direct labor cost: $0.80 * $138,000 = $110,400.

During the Month of August, Ross MotorCo Applied Overhead to Jobs