Question

Munos Publishing Company uses a job-order costing system to collect costs related to the manufacture of specialty publications for corporate training.What journal entry would Munos make to record the application of $1,200 of manufacturing overhead to Job KN672?A) Work in Process____________1,200___Applied Manufacturing Overhead___1,200B) Cost of Goods Manufactured_____1,200___Manufacturing Overhead_________1,200C) Manufacturing Overhead________1,200___Work in Process_______________1,200D) Cost of Goods Manufactured_____1,200___Work in Process_______________1,200

Answer 1

Answer:

A) Work in Process____________1,200

Applied Manufacturing Overhead___1,200

Explanation:

Whenever goods are produced they go through different stages, like opening inventory, work in process and then finished goods.

When the manufacturing overheads are applied, they straight do not result in complete goods, rather they are generally at work in process level.

This, creates a situation of of creating or adding value to work in process.

Thus, applied manufacturing overheads are charged against work in process.

The entry shall be:

Work in Process A/c Dr.                        $1,200

  To Applied Manufacturing Overhead                 $1,200