Price Manufacturing assigns overhead based on machine hours. Department A logs 600 machine hours and Department B shows 1200 machine hours for the period. If the overhead rate is $10 per machine hour, the entry to assign overhead will show a:
A) debit to Manufacturing overhead applied for $18,000.
B) credit to Work in process - department B for $12,000.
C) debit to Work in process for $12,000.
D) credit to Manufacturing overhead applied for $18,000.

Question

Quizplus · Accepted Answer

The entry to assign overhead will show a credit to manufacturing overhead applied for $18,000 ((600 + 1200) x $10).

Price Manufacturing Assigns Overhead Based on Machine Hours