In both job and process costing,the journal entry to record predetermined overhead is as follows.
A) Debit work in process and credit raw materials inventory,salaries payable and manufacturing overhead.
B) Debit work in process and credit manufacturing overhead applied.
C) Debit manufacturing overhead and credit work in process and raw materials inventory.
D) Debit manufacturing overhead and credit work in process inventory.

Question

Quizplus · Accepted Answer

The predetermined overhead rate is based on estimated manufacturing overhead costs and the estimated allocation base (e.g. direct labor hours or machine hours). Once the rate is calculated, it is applied to the actual allocation base incurred during the period to apply overhead costs to production. The journal entry to record this overhead application is to debit Work in Process (WIP) for the amount of overhead allocated to the production process and to credit Manufacturing Overhead Applied for the same amount. Therefore, the correct answer is to debit WIP and credit Manufacturing Overhead Applied.

In Both Job and Process Costing,the Journal Entry to Record