If the predetermined overhead allocation rate is 245% of direct labor cost, and the Baking Department's direct labor cost for the reporting period is $10,000, the following entry would be made to record the allocation of overhead to the products processed in this department:
$\begin{array}{llr}
\text { Work in Process Inventory, Baking Dept. } &24,500\
\text { Factory Overhead} &&24,500\
\end{array}$

Question

If the predetermined overhead allocation rate is 245% of direct labor cost, and the Baking Department's direct labor cost for the reporting period is $10,000, the following entry would be made to record the allocation of overhead to the products processed in this department:
$\begin{array}{llr}
  \text { Work in Process Inventory, Baking Dept. } &24,500\
 \text {  Factory Overhead} &&24,500\
\end{array}$

Quizplus · Accepted Answer

The entry to record allocation of overhead to products in the Baking Department would be:

Debit: Work in Process Inventory, Baking Dept. for $24,500 ($10,000 x 245%)
Credit: Factory Overhead for $24,500

The account numbers and codes shown in the question are not necessary for understanding the journal entry.