Direct labor for the month is $50,000, and overhead is applied based on direct labor cost. Annual overhead is estimated to be $450,000, and annual direct labor is estimated to be $800,000. What is the entry to apply overhead to production?
A) Debit Work-in-Process Inventory $28,125; credit Payroll Payable $28,125
B) Debit Manufacturing Overhead-Applied $28,125; credit Work-in-Process Inventory $28,125
C) Debit Work-in-Process Inventory $28,125; credit Manufacturing Overhead-Applied $28,125
D) Debit Work-in-Process Inventory $50,000; credit Manufacturing Overhead-Applied $50,000
Answer: C
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