If the predetermined overhead allocation rate is 85% of direct labor cost,and the Painting Department's direct labor cost for the reporting period is $20,000,the following entry would be made to record the allocation of overhead to the products processed in this department:
Factory Overhead ………………… 17,000
Goods in Process Inventory,Painting Dept ………………… 17,000

Question

Quizplus · Accepted Answer

The correct entry should debit Goods in Process Inventory and credit Factory Overhead, not the other way around.

If the Predetermined Overhead Allocation Rate Is 85% of Direct