QUESTION 17 During 2018, Lumber Corporation used a predetermined overhead rate o

Question

QUESTION 17 During 2018, Lumber Corporation used a predetermined overhead rate of $1.50 per machine hour in the cutting department. If 1,700 machine hours were used during July, what is the correct journal entry to record the application of overhead? O a. Debit Work in Process-Cutting Department Credit Manufacturing Overhead Amount 2.550 O b. Debit Manufacturing Overhead Credit work in Process-Cutting Department Amount: 1,700 O c Debit: Cost of Goods Sold Cedit: Manufacturing Overhead Amount 2,550 O d. Debit: Manufacturing Overhead Credit Cost of Goods Sold Amount: 1.700

Explanation / Answer

Lumber Corporation Predetermined overhead rate= Estimated total manufacturing overhead cost/Estimated total amount of the allocation base Cutting Department Machine Hours 1700 Predetermined overhead rate 1.5 Application of overhead(1700*1.5) 2550 Journal Entry Particular Amt(Dr) Amt(Cr) WIP-Cutting department $                     2,550.00     To Manufacturing Overhead $    2,550.00

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