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 issuance of materials to production is:
A)Debit Raw Materials Inventory $195,000; credit Accounts Payable $195,000.
B)Debit Work in Process Inventory $195,000; credit Raw Materials Inventory $195,000.
C)Debit Raw Materials Inventory $195,000; credit Work in Process Inventory $195,000.
D)Debit Work in Process Inventory $165,000; debit Factory Overhead $30,000; credit Raw Materials Inventory $195,000.
E)Debit Finished Goods Inventory $195,000; credit Raw Materials Inventory $195,000.

Question

Quizplus · Accepted Answer

The correct journal entry for issuing materials to production includes debiting Work in Process Inventory for the direct materials ($195,000 - $30,000 = $165,000), debiting Factory Overhead for the indirect materials ($30,000), and crediting Raw Materials Inventory for the total materials issued ($195,000).

Minstrel Manufacturing Uses a Job Order Costing System