When direct materials are issued from inventory to production under a job order costing system an increase is recorded in the:

Question

Quizplus · Accepted Answer

When direct materials are issued from inventory to production, the cost of these materials is added to the work in process inventory account because they are now part of the items being manufactured. The manufacturing overhead account represents indirect costs such as rent, utilities, and maintenance, and is not affected by the issuance of direct materials. The materials inventory account is reduced by the cost of the materials issued, not increased. The finished goods inventory account is not affected until the finished products are transferred out of work in process inventory.

When Direct Materials Are Issued from Inventory to Production Under