Minstrel Manufacturing uses a job order costing system.During one month,Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect.Minstrel incurred a factory payroll of $150,000,of which $40,000 was indirect labor.Minstrel uses a predetermined overhead rate of 150% of direct labor cost.
-The journal entry to record the purchase of materials is:
A)Debit Raw Materials Inventory $198,000; credit Accounts Payable $198,000.
B)Debit Work in Process Inventory $198,000; credit Accounts Payable $198,000.
C)Debit Raw Materials Inventory $198,000; credit Work in Process Inventory $198,000.
D)Debit Work in Process Inventory $195,000; credit Raw Materials Inventory $195,000.
E)Debit Raw Materials Inventory $198,000; credit Finished Goods Inventory $198,000.

Question

Quizplus · Accepted Answer

The journal entry to record the purchase of materials is to debit Raw Materials Inventory for the cost of the materials received ($198,000) and to credit Accounts Payable for the same amount.

Minstrel Manufacturing Uses a Job Order Costing System