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