Paltrow Corporation applies unit-related overhead at the rate of $100 per direct-labor hour.If 3,000 direct labor hours were used,which of the following entries should be made?
A)debit to finished goods and credit to manufacturing overhead
B)debit to manufacturing overhead and credit to finished goods
C)debit to work-in-process and credit to manufacturing overhead
D)debit to manufacturing overhead and credit to work-in-process

Question

Quizplus · Accepted Answer

When overhead is applied, it is added to the cost of the product being manufactured, which is initially recorded in the work-in-process (WIP) account. Therefore, the correct entry is to debit work-in-process and credit manufacturing overhead, reflecting the allocation of overhead costs to the products being produced.

Paltrow Corporation Applies Unit-Related Overhead at the Rate of $100