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30 July, 09:05

EB10.

LO 5.5Overhead is assigned to the manufacturing department at the rate of $5 per machine hour. There were 3,000 machine hours used in the molding department. Prepare the journal entry to apply overhead to the manufacturing department.

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  1. 30 July, 09:11
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    Debit Credit

    Work in process inventory $15,000

    Manufacturing overhead clearing account $15,000

    Explanation:

    First determine the amount of applied overhead which can be calculated as follows

    Applied overhead=Rate per machine hour*number of hours

    Applied overhead=$5*3,000=$15,000

    The journal entry for the applied overhead shall be made as follow

    Debit Credit

    Work in process inventory $15,000

    Manufacturing overheads clearing account $15,000
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