During 2017, Cost Savers Production used a predetermined overhead rate of $1.50 per machine hour in the Cutting Department.Actual overhead for the year was $65,000.If 1,700 machine hours were used during the year, what is the correct journal entry to record the application of overhead?
A)Manufacturing Overhead-Cutting Dept..$\quad$$\quad$2,550
Work in Process-Cutting Dept.$\quad$$\quad$$\quad$2,550
B)Work in Process-Cutting Dept.$\quad$$\quad$2,550
Manufacturing Overhead$\quad$$\quad$2,550
C)Cutting Dept. Expenses$\quad$$\quad$2,550
Manufacturing Overhead-Cutting Dept.$\quad$$\quad$2,550
D)Finished Goods$\quad$$\quad$2,550
Work in Process-Cutting Dept$\quad$$\quad$2,550

Question

During 2017, Cost Savers Production used a predetermined overhead rate of $1.50 per machine hour in the Cutting Department.Actual overhead for the year was $65,000.If 1,700 machine hours were used during the year, what is the correct journal entry to record the application of overhead? 
A)Manufacturing Overhead-Cutting Dept..$\quad$$\quad$2,550
Work in Process-Cutting Dept.$\quad$$\quad$$\quad$2,550 
B)Work in Process-Cutting Dept.$\quad$$\quad$2,550
Manufacturing Overhead$\quad$$\quad$2,550 
C)Cutting Dept. Expenses$\quad$$\quad$2,550
Manufacturing Overhead-Cutting Dept.$\quad$$\quad$2,550 
D)Finished Goods$\quad$$\quad$2,550
 Work in Process-Cutting Dept$\quad$$\quad$2,550

Quizplus · Accepted Answer

The predetermined overhead rate is $1.50 per machine hour, and 1,700 machine hours were used, so the applied overhead is 1,700 hours * $1.50/hour = $2,550. The correct journal entry to record the application of overhead increases Work in Process and decreases Manufacturing Overhead.

During 2017, Cost Savers Production Used a Predetermined Overhead Rate \quad

During 2017, Cost Savers Production Used a Predetermined Overhead Rate $\quad$