which of the following entries would record the application of overhead cost correctly?\na) work in process…

which of the following entries would record the application of overhead cost correctly?\na) work in process xxx\naccounts payable xxx\nb) manufacturing overhead xxx\naccounts payable xxx\nc) manufacturing overhead xxx\nwork in process xxx\nd) work in process xxx\nmanufacturing overhead xxx

which of the following entries would record the application of overhead cost correctly?\na) work in process xxx\naccounts payable xxx\nb) manufacturing overhead xxx\naccounts payable xxx\nc) manufacturing overhead xxx\nwork in process xxx\nd) work in process xxx\nmanufacturing overhead xxx

Answer

Brief Explanations:

When overhead cost is applied, it is added to the Work - in - Process inventory. The manufacturing overhead account is credited as the overhead is being transferred out of the manufacturing overhead pool and into the Work - in - Process. So the correct entry is to debit Work in Process (increasing the asset of Work - in - Process inventory with the applied overhead) and credit Manufacturing Overhead (reducing the manufacturing overhead account as the overhead is applied).

Answer:

D. Work in Process XXX, Manufacturing Overhead XXX