# Recording Manufacturing Overhead Costs## OverviewDuring December, Moulding Corporation incurred $76,000 of actual Manufacturing Overhead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $74,000.## Required:Prepare journal entries to record the incurrence of manufacturing overhead and the application of manufacturing overhead to Work in Process.### Steps to Record Journal Entries1. **Recording Actual Manufacturing Overhead Costs:** - Debit: Manufacturing Overhead - Credit: Various Accounts (Cash, Accounts Payable, Accumulated Depreciation, etc.)2. **Applying Manufacturing Overhead to Work in Process:** - Debit: Work in Process Inventory - Credit: Manufacturing Overhead### Example Journal Entries1. **Incurrence of Manufacturing Overhead Costs:** ``` Debit: Manufacturing Overhead $76,000 Credit: Accounts Payable $76,000 ```2. **Application of Manufacturing Overhead to Work in Process:** ``` Debit: Work in Process Inventory $74,000 Credit: Manufacturing Overhead $74,000 ```### Explanation of Journal Entries- The first journal entry records the actual overhead costs incurred during the month of December. These costs are debited to the Manufacturing Overhead account, indicating an increase in overhead costs.- The second entry applies the manufacturing overhead to work in process, thereby transferring the overhead costs to the cost of products being manufactured. This is necessary for accurate product costing and inventory valuation.### ConclusionAccurate recording and application of manufacturing overhead is crucial for maintaining precise cost records and ensuring reliable financial reporting. By following these steps and recording the appropriate journal entries, Moulding Corporation can keep its financial statements accurate and up-to-date.

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Description: # Recording Manufacturing Overhead Costs## OverviewDuring December, Moulding Corporation incurred $76,000 of actual Manufacturing Overhead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $74,000.## Required:P

Under applied (over applied) manufacturing overhead costs = Actual manufacturing overhead costs -…

Business

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During December, Moulding Corporation incurred $76,000 of actual Manufacturing Overtlead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $74,000. Required: Prepare journal entries to record the incurrence of manufacturing overhead and the application of manufacturing overhead to Work in Process.

During December, Moulding Corporation incurred $76,000 of actual Manufacturing Overtlead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $74,000. Required: Prepare journal entries to record the incurrence of manufacturing overhead and the application of manufacturing overhead to Work in Process.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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