Coat-All Paint Company used a predetermined overhead allocation rate to allocate $80,000 and $50,000 of indirect costs to the Coloring Department and the Mixing Department,respectively.The journal entry to record the allocation of overhead costs to the Coloring Department is ________.Process costing is used.
A) debit Manufacturing Overhead, $80,000; credit Work-in-Process Inventory-Mixing, $80,000
B) debit Work-in-Process Inventory-Coloring, $80,000; credit Manufacturing Overhead, $80,000
C) debit Work-in-Process Inventory-Coloring, $50,000; credit Manufacturing Overhead, $50,000
D) debit Manufacturing Overhead, $50,000; credit Work-in-Process Inventory-Mixing, $50,000

Question

Quizplus · Accepted Answer

The allocation of overhead costs to the Coloring Department would be recorded by debiting the Work-in-Process Inventory-Coloring account and crediting the Manufacturing Overhead account for the amount of overhead allocated, which is $80,000 in this case. Therefore, option B is the correct choice. Option A and D are incorrect because they allocate overhead costs to the Mixing Department instead of the Coloring Department. Option C is incorrect because it allocates only $50,000 of overhead costs to the Coloring Department, which is incorrect as the question states that $80,000 of overhead costs have been allocated to the Coloring Department.

Coat-All Paint Company Used a Predetermined Overhead Allocation Rate to Allocate