In Crawford Company, the predetermined overhead rate is 80% of direct labor cost. During the month, Crawford incurs $210,000 of factory labor costs, of which $180,000 is direct labor and $30,000 is indirect labor. The actual overhead incurred was $200,000. The amount of overhead debited to Work in Process Inventory should be:

a. $200,000

b. $168,000

c. $144,000

d. $160,000.

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Karabo99 Karabo99 · Answer 1 · 2019-09-15T21:54:37+02:00

Answer:

c. $144000.

Explanation:

the predetermined overhead rate = 80% of direct labour costs

The amount of overhead debited to Work in Process Inventory is:

(80%)(180000)

= $ 144000

Therefore, The amount of overhead debited to Work in Process Inventory should be $144000.

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abiolataiwo2015 abiolataiwo2015 · Answer 2 · 2022-04-01T11:44:54+02:00

The amount of overhead debited to Work in Process Inventory should be:c. $144,000.

Using this formula

Work in process inventory= Predetermined overhead rate×Factory labor cost

Where:

Predetermined overhead rate=80%

Factory labor cost=$180,000

Let plug in the formula

Work in process inventory=.80×$180,000

Work in process inventory=$144,000

Inconclusion the amount of overhead debited to Work in Process Inventory should be:c. $144,000.

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