If the predetermined overhead allocation rate is 350% of direct labor cost and the Painting Department's direct labor cost for the reporting period is $20,000, the following entry would record the allocation of overhead to the products processed in this department:
$\begin{array}{l}
\text { Goods in Process Inventory, Painting Dept } &70,000\
\text { Factory Overhead }&&70,000
\end{array}$

Question

If the predetermined overhead allocation rate is 350% of direct labor cost and the Painting Department's direct labor cost for the reporting period is $20,000, the following entry would record the allocation of overhead to the products processed in this department:
 $\begin{array}{l}
\text { Goods in Process Inventory, Painting Dept } &70,000\
\text { Factory Overhead }&&70,000
\end{array}$

Quizplus · Accepted Answer

The overhead allocation is calculated as 350% of the direct labor cost, which is $20,000. Therefore, the overhead allocated is 350% of $20,000, which equals $70,000. The journal entry correctly reflects this allocation.