Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for overhead allocation is Direct materials used $ 89,000
Direct labor used 162,000
Predetermined overhead rate (based on direct labor) 157 %
Goods transferred to finished goods 434,000
Cost of goods sold 446,000
Credit sales 830,000
1. Debit Work in Process Inventory $251,160; credit Factory Overhead $251,160.
2. Debit Work in Process Inventory $161,000; credit Factory Wages $161,000.
3. Debit Work in Process Inventory $161,000; credit Cash $161,000.
4. Debit Work in Process Inventory $161,000; credit Factory Overhead $161,000.

Amount of Factory Overhead = 254,340

Explanation:

Computation of overhead:

Amount of Factory Overhead = 157% of Direct labor used

Amount of Factory Overhead = 157% (162,000)

Amount of Factory Overhead = 254,340

Journal entry.

Account title and explanation        DebitCredit

Work in Process Inventory                $254,340  

Factory Overhead                                     $254,340

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