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Rorry Company uses a job cost system. Overhead was applied to production using a rate of 78 percent of direct labor costs. What is the journal entry when direct labor costs are $18,000

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Answer:

Dr Work in Process Inventory for $14,040

Cr Manufacturing Overhead for $14,040

Explanation:

Based on the information given we were told that the company applied Overhead to production using a rate of 78% of direct labor costs which means that the journal entry when direct labor costs are the amount of $18,000 will be :

Dr Work in Process Inventory for $14,040

Cr Manufacturing Overhead for $14,040

(78%*18,000)

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