How Is the Cost of Direct Materials Used in Production

question 242

Multiple Choice

How is the cost of direct materials used in production recorded?

• A)Credit to Manufacturing Overhead account
• B)Credit to Work-in-Process Inventory account
• C)Credit to Direct Materials Expense account
• D)Credit to Raw Materials Inventory account

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Definitions:

Annual Cash Inflow

The total amount of money received by a business or project within a year from all sources.

Equipment

Tools or machinery used for specific tasks, particularly in industries and manufacturing.

Financially Attractive

Describes an investment or project that is expected to deliver a favorable financial return or profit.

Salvage Value

The estimated residual value of an asset at the end of its useful life, reflecting the amount for which it could be sold or disposed.