EA16.

LO 5.5Overhead is assigned to the manufacturing department at the rate of $10 per machine hour. There were 3,500 machine hours during October in the shaping department and 2,500 in the packaging department. Prepare the journal entry to apply overhead to the manufacturing departments.

The journal entry is shown below:

Work in process A/c - shaping department Dr $35,000

Work in process A/c - packaging department Dr $25,000

To Manufacturing overhead A/c $60,000

(Being apply overhead to the manufacturing departments is recorded)

The computation is shown below:

For shaping department

= 3,500 machine hours * $10 per machine hour

= $35,000

For Packaging department

= 2,500 machine hours * $10 per machine hour

= $25,000