Mona Company has decided that direct labor hours is a good basis on which to apply overhead
Question:
Mona Company has decided that direct labor hours is a good basis on which to apply overhead to production. The predetermined overhead rate for the most recent year is $10 for each direct labor hour. The following data were collected during the year:
Actual number of direct labor hours worked = 25,000 hours
Actual amount of manufacturing overhead = $230,000
Mona Company applied manufacturing overhead during the year.
Which ONE of the following should be included in the summary journal entry necessary to record this application of manufacturing overhead?
CREDIT to Manufacturing Overhead for $250,000
CREDIT to Manufacturing Overhead for $230,000
CREDIT to Work-in-Process Inventory for $230,000
CREDIT to Work-in-Process Inventory for $250,000
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer