Hou Company Applies Factory Overhead to Its Production Departments on the Basis

Multiple Choice

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) $\begin{array}{l}\text { Factory Overhead - Assembly } & 112,500 \\\text { Factory Overhead - Finishing } & 31,500\\\text { Work in Process }&&144,000\end{array}$

B) $\begin{array}{llr} \text {Factory Overhead } &144,000\\ \text { Work in Process - Assembly} &&112,500\\ \text { Work in Process - Finishing} &&31,500\end{array}$


C) $\begin{array}{llr} \text { Factory Overhead} &144,000\\ \text { Factory Payroll } &&144,000\\\end{array}$


D) $\begin{array}{l}\text { Work in Process - Assembly } & 112,500 \\\text { Work in Process - Finishing } & 31,500\\\text { Factory Overhead }&&144,000\end{array}$

E) $\begin{array}{llr} \text { Factory Payroll } &144,000\\ \text { Cash } &&144,000\end{array}$