Journal Entry for Manufacturing Overhead
Journal Entry for Manufacturing Overhead allocates indirect production costs—like utilities and maintenance—to the cost of goods produced, giving businesses an accurate picture of total production expenses.
When costs are incurred, the business debits Manufacturing Overhead and credits relevant accounts (e.g., Utilities Payable, Accounts Payable).
Overhead allocation is like a puzzle. It connects all the cost pieces, giving a full picture of production costs.
