Xtra Company uses a job-order costing system to account for product costs. The following information pertains to the current year:
Factory overhead rate is $18 per direct labour hour.
$$\begin{array} { l r }
\text { Materials placed into production } & \$ 160,000 \
\text { Indirect labour } & 40,000 \
\text { Direct labour (10,000 hours) } & 180,000 \
\text { Depreciation of factory building } & 60,000 \
\text { Other factory overhead } & 100,000 \
\text { Increase in work-in-process inventory } & 50,000
\end{array}$$
-Refer to the Figure.What is the total amount credited to materials inventory for Xtra in the current year?

Question

Xtra Company uses a job-order costing system to account for product costs. The following information pertains to the current year:
Factory overhead rate is $18 per direct labour hour.
 $$\begin{array} { l r } 
\text { Materials placed into production } & \$ 160,000 \
\text { Indirect labour } & 40,000 \
\text { Direct labour (10,000 hours) } & 180,000 \
\text { Depreciation of factory building } & 60,000 \
\text { Other factory overhead } & 100,000 \
\text { Increase in work-in-process inventory } & 50,000
\end{array}$$
-Refer to the Figure.What is the total amount credited to materials inventory for Xtra in the current year?

Quizplus · Accepted Answer

The total amount credited to materials inventory is equal to the materials placed into production, which is $160,000. This is because the materials placed into production are moved from the materials inventory to work-in-process inventory, thus reducing the materials inventory by that amount.

Xtra Company Uses a Job-Order Costing System to Account for Product