a material requisition slip showed that direct requested were $76000 and indirect materials requested were $3000. The entry to record the transfer of materials from the storeroom is.

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Business

Ezequiel

30 June, 19:49

a material requisition slip showed that direct requested were $76000 and indirect materials requested were $3000. The entry to record the transfer of materials from the storeroom is.

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Kolten Hopkins · Answer 1

1) Work in process (Debit) 76,000

Raw Material Inventory (Credit) 76,000

2) Manufacturing overheads (Debit) 3,000

Raw Material Inventory (Credit) 3,000

Explanation:

1) Material obtained from storeroom is recorded by debiting work in process with corresponding credit to raw material inventory. Than work in process is transferred to finished goods upon completion of conversion.

Work in process (Debit) 76,000

Raw Material Inventory (Credit) 76,000

2) Indirect material usage is charged to manufacturing overheads as usually companies do not keep track of how much indirect material is used for particular job. Thus following entry is made for usage of indirect material.

Manufacturing overheads (Debit) 3,000

Raw Material Inventory (Credit) 3,000

All actual manufacturing overhead expenses are debited in manufacturing overheads account, further applied overhead are also recorded via following general entry using appropriate basis (direct labor hours, machine hours etc.):

Work in Process (Debit)

Manufacturing overheads (Credit)

Upon completion of an accounting period, any debit / credit in manufacturing overheads account is adjusted against finished goods or cost of goods sold.