Fernandez Manufacturing uses a standard cost system
Standard and actual data for manufacturing overhead are as follows:
Variable overhead allocation rate: $30 per direct labor hour
Fixed overhead allocation rate: $10 per direct labor hour
Actual overhead incurred (variable and fixed): $45,600
Standards for direct labor are as follows:
Hours per unit 0.5, Direct labor cost per hour $18.00
Actual direct labor for the month: 1,200 hours for a total cost of $24,000
Actual and planned production for the month: 3,000 units
Prepare the journal entry to allocate overhead cost (both variable and fixed) to production.
What will be an ideal response
Work-in-Process Inventory 60,000
Manufacturing Overhead 60,000
Manufacturing overhead costs allocated .Total Direct Labor Hours = 3,000 units x 0.5 hours = 1,500 DLHr
1,500 x ($30 + $10 ) = $60,000
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