When indirect materials are requisitioned from the materials storeroom and placed in production, an entry is made crediting Raw Materials Inventory and debiting

Question

Quizplus · Accepted Answer

Indirect materials are considered part of manufacturing overhead costs because they cannot be directly traced to a finished product. When they are requisitioned for production, the cost is added to Manufacturing Overhead, not directly to Work in Process Inventory.

When Indirect Materials Are Requisitioned from the Materials Storeroom and Placed