Morewell,Inc.used a predetermined overhead allocation rate to allocate $85,000 and $65,000 of indirect costs to Coloring Department and Mixing Department,respectively.The journal entry to record the allocation of overhead costs to the Coloring Department is ________.
A) debit Manufacturing Overhead, $85,000; credit Work-in-Process Inventory-Mixing, $85,000
B) debit Work-in-Process Inventory-Coloring, $85,000; credit Manufacturing Overhead, $85,000
C) debit Work-in-Process Inventory-Coloring, $65,000; credit Manufacturing Overhead, $65,000
D) debit Manufacturing Overhead, $65,000; credit Work-in-Process Inventory-Mixing, $65,000

Question

Quizplus · Accepted Answer

The journal entry to record the allocation of overhead costs to the Coloring Department would be to debit the Work-in-Process Inventory-Coloring for $85,000 and credit Manufacturing Overhead for $85,000. This entry reflects the allocation of the predetermined overhead rate, which is applied based on the amount of activity that occurs in each department.