The journal entry to issue $500 of direct materials and $30 of indirect materials to production includes which of the following?
A) Debit to Work in process for $500 and debit to Finished goods for $30
B) Debit to Manufacturing overhead for $530
C) Debit to Work in process for $500 and debit to Manufacturing overhead for $30
D) Debit to Work in process inventory for $530

Question

Quizplus · Accepted Answer

Direct materials are debited to Work in Process inventory (as they are directly used in production) and indirect materials are debited to Manufacturing Overhead (as they do not form part of the finished product). Therefore, the correct entry would be a debit of $500 to Work in Process and a debit of $30 to Manufacturing Overhead, for a total debit of $530. Option A and B are incorrect because they do not account for the difference between direct and indirect materials, and option D only debits Work in Process inventory, ignoring the indirect materials portion.

The Journal Entry to Issue $500 of Direct Materials and $30