If the predetermined overhead allocation rate is 350% of direct labor cost and the Painting Department's direct labor cost for the reporting period is $20,000,the following entry would record the allocation of overhead to the products processed in this department:
$\begin{array}{llr}
\text {Goods in Process Inventory, Painting Dept } &70,000\
\text { Factory Overhead} &&70,000\
\end{array}$

Question

If the predetermined overhead allocation rate is 350% of direct labor cost and the Painting Department's direct labor cost for the reporting period is $20,000,the following entry would record the allocation of overhead to the products processed in this department:
 $\begin{array}{llr}
  \text {Goods in Process Inventory, Painting Dept } &70,000\
 \text {  Factory Overhead} &&70,000\
\end{array}$

Quizplus · Accepted Answer

The overhead allocation is calculated as 350% of the direct labor cost, which is $20,000. Therefore, the overhead allocated is 3.5 * $20,000 = $70,000. The journal entry correctly reflects this allocation.