Denherder Inc. has provided the following data for the month of November. There

Question

Denherder Inc. has provided the following data for the month of November. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month

Manufacturing overhead for the month was underapplied by $5,000.
The company allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.

The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for November would include the following:
a) credit to Work in Process of $11,200
b) credit to Work in Process of $250
c) debit to Work in Process of $250
d) debit to Work in Process of $11,200

Explanation / Answer

WIP = 11200 +(3250/65000) *5000 = 11450

credit in WIP = 11450 -11200 = 250

hence the answer is b)

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