Midtown,Inc.uses a predetermined overhead allocation rate of $67 per direct labor hour.In January,the company completed Job A23 which utilized 24 direct labor hours.Which of the following correctly describes the journal entry to allocate overhead to the job?

Question

Quizplus · Accepted Answer

To allocate overhead to a job, the Work-in-Process Inventory account should be debited, and Manufacturing Overhead should be credited. The amount of overhead allocated is calculated by multiplying the predetermined overhead allocation rate ($67) by the number of direct labor hours used on the job (24 hours). Therefore, the journal entry to allocate overhead to Job A23 would be:
Debit Work-in-Process Inventory $1608
Credit Manufacturing Overhead $1608