When applying fixed manufacturing overhead to production in transaction (d) above, the Work in Process inventory account will increase (decrease) by:

A) ($109,800)
B) $22,400
C) $109,800
D) ($22,400)

Question

When applying fixed manufacturing overhead to production in transaction (d) above, the Work in Process inventory account will increase (decrease) by:A) ($109,800)B) $22,400C) $109,800D) ($22,400)

Jenna Marsman · Accepted Answer

Final Answer : C, Explanation :  From transaction (d), we know that the total fixed manufacturing overhead incurred during the period was $109,800. This fixed overhead is applied to production and increases the Work in Process (WIP) inventory account. Therefore, the WIP inventory account will increase by the same amount as the fixed overhead incurred, which is $109,800. Thus, the correct answer is (C). Work in Process increases by the standard amount of hours allowed for the actual output multiplied by the predetermined overhead rate, which is (18,300 units × 0.50 hours per unit)× $12.00 per hour = 9,150 hours × $12.00 per hour = $109,800.

When applying fixed manufacturing overhead to production in transaction (d) above, the Work in Process inventory account will increase (decrease) by:

A) ($109,800)
B) $22,400
C) $109,800
D) ($22,400)

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Learning Objectives

Related questions

When applying fixed manufacturing overhead to production in transaction (d) above, the Work in Process inventory account will increase (decrease) by:A) ($109,800) B) $22,400C) $109,800D) ($22,400)

Definitions

Learning Objectives

Learning Objectives

Related questions

When applying fixed manufacturing overhead to production in transaction (d) above, the Work in Process inventory account will increase (decrease) by:

A) ($109,800)
B) $22,400
C) $109,800
D) ($22,400)