Fun Stuff Manufacturing produces frisbees using a three-step process that includes molding, coloring and finishing. The purchase of materials includes a

Question

Quizplus · Accepted Answer

The purchase of materials should be initially recorded as a debit to the raw materials inventory account, as this account reflects the cost of the materials purchased and awaiting use in production. A debit to WIP inventory-molding would be appropriate once the raw materials have been issued to the production line for molding. A credit to manufacturing overhead would be appropriate for indirect materials, but not for direct materials like those used to make frisbees. A credit to raw materials inventory would be incorrect, as this account should not be credited until the materials have been returned or otherwise removed from inventory.

Fun Stuff Manufacturing Produces Frisbees Using a Three-Step Process That