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Question
Hou Company applies factory overhead to its production departments on the basis of 90% of direct labor costs. In the Assembly Department, Hou had $125,000 of direct labor cost, and in the Finishing Department, Hou had $35,000 of direct labor cost. The entry to apply overhead to these production departments is:
| A. | Factory Overhead Assembly | 112,500 | |
| Factory Overhead Finishing | 31,500 | ||
| Work in Process | 144,000 | ||
| B. | Factory Overhead | 144,000 | |
| Work in Process Assembly | 112,500 | ||
| Work in Process Finishing | 31,500 | ||
| C. | Factory Overhead | 144,000 | |
| Factory Payroll | 144,000 | ||
| D. | Work in Process Assembly | 112,500 | |
| Work in Process Finishing | 31,500 | ||
| Factory Overhead | 144,000 | ||
| E. | Factory Payroll | 144,000 | |
| Cash | 144,000 | ||
Answer
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