Whirligig Kite Company traditionally applies overhead to Work in Process based u

Question

Whirligig Kite Company traditionally applies overhead to Work in Process based upon machine hours. For the period ended 7/3/07, budgeted factory overhead was $360,000, and budgeted machine hours were 18,000. For this period, the actual hours of machine running time were 18,650.



Create the journal entry to apply overhead to production.

GENERAL JOURNAL

ACCOUNT TITLE DEBIT
(Select an account from
below and tell it's debit)
Cost of Goods sold
or
Finished goods inventory
or
Manufacturing expenses
or
Miscellaneous expense
or
Raw Materials Inventory
or
Work in Process Inventory


ACCOUNT TITLE CREDIT
(Select an account from
below and tell it's credit)
Indirect labour
or
Manufacturing Overhead
or
Miscellaneous Expense
or
Non-Manufacturing Overhead
or
Selling Expense




*Select the correct accounts provided under the Account Title and type the amounts for each account*

Explanation / Answer

$360,000 * (18650/18000) = 360,000 * 10.361 = $373,000 Debit Work in Process Inventory 373,000 Credit Manufacturing Overhead 373,000

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