ABC Company Uses a Materials Inventory Account to Record Both

question 52

Multiple Choice

ABC Company uses a Materials Inventory account to record both direct and indirect materials. ABC charges direct materials to WIP, while indirect materials are charged to the Factory Overhead account. During the month of April, the company has the following cost information: $\begin{array}{lr}\text { Total materials (direct and indirect) purchased } & \$ 90,000 \\\text { Indirect materials issued to production } & 30,000 \\\text { Total materials issued to production } & 110,000 \\\text { Beginning materials inventory } & 50,000\end{array}$ The debit to the Factory Overhead account is:

• A)$110,000.
• B)$30,000.
• C)$90,000.
• D)$80,000.
• E)$50,000.

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Definitions:

Judicial Interpretation

The process by which courts interpret and apply legislation, legal principles, and constitutional provisions in the context of legal cases.

Nonconforming Goods

Goods that are delivered under a sales contract that fail to meet the specifications, quantity, or quality stipulated in the contract.

Damages

Monetary compensation awarded to a person who has suffered loss or harm due to the unlawful act or negligence of another.

Buyer

An individual or entity that purchases goods or services from another.