Question

When a manufacturing company uses direct​ materials, it assigns the cost by debiting A. Direct Materials. B. ​Work-in-Process Inventory. C. Manufacturing Overhead. D. Raw Materials Inventory.

Answer 1

When a manufacturing company uses direct​ materials, it assigns the cost by debiting Work-in-Process Inventory.

Option: B

Explanation:

The nearly completed products of a business that await fulfillment and subsequent selling or the valuation of those commodities is understood as a work-in-process inventory. These products are either produced in a line or in a buffer stock, or are pending for any further handling. The concept is employed in controlling the manufacturing and distribution chain. Optimum quality control is aimed at reducing system activity. Function in system requires storage space, reflects attached capital that is not accessible for investment and brings an inherent risk of previous expiry of the goods' shelf life.