The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for January would include the following:

A) credit to Work in Process of $480
B) debit to Work in Process of $8,830
C) debit to Work in Process of $480
D) credit to Work in Process of $8,830

Question

Linda Bawah · Accepted Answer

Final Answer : C, Explanation :  If the manufacturing overhead applied throughout the month is less than the actual manufacturing overhead incurred, then we have an overapplied overhead which needs to be allocated to the inventory accounts. On the other hand, if the applied manufacturing overhead is more than the actual manufacturing overhead incurred, then we have an underapplied overhead which also needs to be allocated.In this case, the question does not provide any information about whether there was an overapplied or underapplied overhead. As a result, we cannot determine whether we need to debit or credit the Work in Process account.However, we do know that the amount of underapplied or overapplied overhead for the month was $480. Since the question is asking for the journal entry to record the allocation of this amount, we would need to debit or credit the appropriate account(s) to allocate the amount.According to the answer choices, the only option that includes a debit to the Work in Process account is option C. Therefore, the answer is C, a debit to Work in Process of $480. Allocating underapplied manufacturing overhead increases the balances in the inventory and cost of goods sold accounts, resulting in debits to those accounts.   Reference: CH03-Ref30Centore Inc.has provided the following data for the month of June.There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.   Manufacturing overhead for the month was underapplied by $3,000.The company allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.

The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for January would include the following:

A) credit to Work in Process of $480
B) debit to Work in Process of $8,830
C) debit to Work in Process of $480
D) credit to Work in Process of $8,830

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The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for January would include the following:A) credit to Work in Process of $480B) debit to Work in Process of $8,830C) debit to Work in Process of $480D) credit to Work in Process of $8,830

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Learning Objectives

Learning Objectives

Related questions

The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for January would include the following:

A) credit to Work in Process of $480
B) debit to Work in Process of $8,830
C) debit to Work in Process of $480
D) credit to Work in Process of $8,830