When a company uses direct materials, the amount of the debit to Work in Process Inventory is based on the standard quantity of the materials allowed for the actual production times the standard price per unit of the materials.

Question

Quizplus · Accepted Answer

This is correct, the amount of the debit to Work in Process Inventory is calculated based on the standard quantity of materials allowed for actual production and the standard price per unit of those materials. This is part of standard costing, where predetermined standards are used to calculate costs and variances.

When a Company Uses Direct Materials, the Amount of the Debit