ECONOMICS

Detailed explanation-1: -A receiving report is prepared when purchased materials are first received by the manufacturing department. A business must maintain limited access to materials to have an effective control of materials. Purchase requisition form is prepared by the purchasing agent.

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: -When a company purchases raw materials, the raw materials are recorded into inventory, which results in a debit to raw materials. Typically, a company will pay for raw materials on credit, which would result in a credit to accounts payable.

Detailed explanation-4: -The first step performed in preparing a production cost report is computing the equivalent units of production. When equivalent units of production are different for materials and conversion costs, unit costs are computed for materials, conversion, and total manufacturing.