COST ACCOUNTING
COST BOOK KEEPING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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-Account debited:Material inventory-Account credited:Production overhead
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-Account debited:Material inventory-Account credited:Work-in-progress
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-Account debited:Production overhead-Account credited:Material inventory
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-Account debited:Work-in-progress-Account credited:Material inventory
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Detailed explanation-1: -The entry to record the indirect material is to debit manufacturing overhead and credit raw materials inventory. Indirect labor records are also maintained through time tickets, although such work is not directly traceable to a specific job.
Detailed explanation-2: -Answer and Explanation: True, when indirect materials are issued to production, they are debited to manufacturing overhead and the Raw Materials Inventory account is credited. Indirect materials are materials that are used in the production process but cannot be directly traced to a cost object.
Detailed explanation-3: -The journal entry to record the use of INDIRECT materials in production is to:-debit Raw Materials Inventory and credit Factory Overhead.
Detailed explanation-4: -The debit to Factory Overhead for the cost of indirect materials is obtained from the summary of the material requisitions. Cost accounting systems measure, record, and report product costs. The direct labor costs and factory overhead costs incurred by a production department are referred to as conversion costs.