Question

During July at Loeb Corporation, $83,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $4,000. The journal entry to record the requisition from the storeroom would include a: A) debit to Work in Process of $79,000 B) debit to Work in Process of $83,000 C) credit to Manufacturing Overhead of $4,000 D) debit to Raw Materials of $83,000

Answer 1

Answer:

The correct answer is A) debit to Work in Process of $79,000.

Explanation:

The direct material issued for production is recorded in work in process account directly. However, indirect supplies are included in factory overhead control account. Factory overhead expenses are allocated to work in process on some pre-defined basis. For more detail please refer to accounting entry given below.

Debit WIP Account (direct supplies)                            $ 79,000

Debit Factory Overhead Control Account (Indirect)     $ 4,000

Credit Raw material Asset Account                             $ 84,000