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23 November, 10:11

For Wilton Company, the predetermined overhead rate is 70% of direct labor cost. During the month, $720,000 of factory labor costs are incurred of which $200,000 is indirect labor. Actual overhead incurred was $360,000. The amount of overhead debited to Work in Process Inventory should be

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  1. 23 November, 10:25
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    Amount of overhead debited to Work in Process Inventory is $364,000

    Explanation:

    Direct labor cost = Total labor cost - Indirect labor cost

    Direct labor cost = $720,000 - $200,000 = $520,000

    Overhead debited to Work in Process Inventory = 70% * Direct labor cost

    =70% * $520,000

    =$364,000
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