Question

Knowledge Check 03 During January, Dream House Builders, Inc. incurred $550 of actual indirect materials costs, as supported by materials requisitions. Complete the necessary journal entry by selecting the account names and dollar amounts from the drop-down menus.

Answer 1

Answer:

Debit:  Work in Process Inventory $550

Credit: Actual Indirect Material Costs $550

Transferred Raw Material to Production.

Explanation:

Material Requisition is form in which a production department requests a Raw Material Department to release the Raw Material into a Production Phase.

The Indirect Material costs are those which are not easily identified and are not usually a part of finished good or end product.

The Cost of Actual Indirect Material is given so we can have the above Journal entry for material requisition.