Portside Watercraft uses a job order costing system.During one month Portside purchased $173,000 of raw materials on credit; issued materials to production of $164,000,of which $24,000 were indirect.Portside incurred a factory payroll cost of $95,000,of which $25,000 was indirect labor.Portside uses a predetermined overhead rate of 170% of direct labor cost.
-The journal entry to record the issuance of materials to production is:
A)Debit Raw Materials Inventory $153,000; credit Accounts Payable $153,000.
B)Debit Work in Process Inventory $140,000; debit Factory Overhead $24,000; credit Raw Materials Inventory $164,000.
C)Debit Raw Materials Inventory $195,000; credit Work in Process Inventory $195,000.
D)Debit Work in Process Inventory $140,000; debit Raw Materials Inventory $24,000; credit Materials Inventory $164,000.
E)Debit Finished Goods Inventory $140,000; credit Raw Materials Inventory $140,000.

Question

Quizplus · Accepted Answer

The journal entry to record the issuance of materials to production includes debiting Work in Process Inventory for the direct materials cost ($140,000) and debiting Factory Overhead for the indirect materials cost ($24,000), and crediting Raw Materials Inventory for the total cost of materials issued to production ($164,000).

Portside Watercraft Uses a Job Order Costing System