On June 1, 2012, Dalton Production Company had beginning balances as shown in the T-accounts below. During June, the following transactions took place:
June 2: Issue $2,400 of direct materials and $200 of indirect materials to production.
Following this transaction, what was the balance in the Manufacturing overhead account?

Question

On June 1, 2012, Dalton Production Company had beginning balances as shown in the T-accounts below.  During June, the following transactions took place:
June 2: Issue $2,400 of direct materials and $200 of indirect materials to production.
Following this transaction, what was the balance in the Manufacturing overhead account?

Quizplus · Accepted Answer

The transaction indicates that $200 of indirect materials were issued to production, which means that the remaining $2,200 ($2,400 - $200) of materials were direct materials. Direct materials are recorded in the Work in process account, not the Manufacturing overhead account, so the Manufacturing overhead account balance would remain unchanged at $41,200.

On June 1, 2012, Dalton Production Company Had Beginning Balances