Minstrel Manufacturing Uses a Job Order Costing System

question 103

Multiple Choice

Minstrel Manufacturing uses a job order costing system.During one month,Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect.Minstrel incurred a factory payroll of $150,000,of which $40,000 was indirect labor.Minstrel uses a predetermined overhead rate of 150% of direct labor cost.
-The journal entry to record the purchase of materials is:

• A)Debit Raw Materials Inventory $198,000; credit Accounts Payable $198,000.
• B)Debit Work in Process Inventory $198,000; credit Accounts Payable $198,000.
• C)Debit Raw Materials Inventory $198,000; credit Work in Process Inventory $198,000.
• D)Debit Work in Process Inventory $195,000; credit Raw Materials Inventory $195,000.
• E)Debit Raw Materials Inventory $198,000; credit Finished Goods Inventory $198,000.

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Definitions:

Consideration

The value (such as money, services, or goods) that is promised in a contract to be exchanged to make the contract legally binding.

Subsequent Transferees

Individuals or entities that receive property rights or interests from previous holders through a legal process of transfer.

Authentic

Genuine, original, and not a copy or imitation; true and accurate.

Consideration

Something of value that is exchanged between parties in a contract, making the agreement legally binding.