Portside Watercraft uses a job order costing system.During one month Portside purchased $153,000 of raw materials on credit;issued materials to production of $164,000 of which $24,000 were indirect.Portside incurred a factory payroll of $95,000,paid in cash,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:

Question

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This journal entry reflects the cost of the materials issued to production ($140,000) as well as the indirect materials added to overhead ($24,000). The Raw Materials Inventory account is credited for the total cost of the materials purchased ($153,000) but only the cost of materials used in production is transferred to Work in Process Inventory. The predetermined overhead rate is not applied at this point in the process.

Portside Watercraft Uses a Job Order Costing System