During the period,labor costs incurred on account amounted to $175,000,including $150,000 for production orders and $25,000 for general factory use.Factory overhead applied to production was $23,000.The entry to record the factory overhead applied to production is

Question

Quizplus · Accepted Answer

The entry to record factory overhead applied to production is a debit to Work in Process (WIP) for the amount of overhead applied, and a credit to Factory Overhead (FO) for the same amount. The purpose of this entry is to allocate overhead costs to the product being produced, so that the cost of goods sold (COGS) will be more accurate.

Option A is incorrect because it records only the factory overhead, but not the corresponding entry to Work in Process.

Option B is incorrect because it records only the factory overhead applied, but not the corresponding entry to Work in Process.

Option D is incorrect because it records the factory overhead as an expense, which is not correct, as factory overhead includes both variable and fixed costs.

Therefore, the best choice is option C.

During the Period,labor Costs Incurred on Account Amounted to $175,000,including