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:

Question

Quizplus · Accepted Answer

The entry would be made to allocate overhead and it would be based on the predetermined overhead allocation rate, which in this case is 245% of direct labor cost. Therefore, the entry would be based on multiplying the Baking Department's direct labor cost for the reporting period ($10,000) by the predetermined overhead allocation rate (245%), and recording the amount as overhead allocated to the products processed in this department.

If the Predetermined Overhead Allocation Rate Is 245% of Direct