How Is the Cost of Indirect Materials Used in the Factory

question 27

Multiple Choice

How is the cost of indirect materials used in the factory recorded?

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

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Definitions:

FICA Tax

Federal Insurance Contributions Act tax used to finance federal programs for old-age and disability benefits (social security) and health insurance for the aged (Medicare).

Payroll Tax

Taxes imposed on employers and employees, calculated as a percentage of the salaries that employers pay to their staff.

Note Payable

A written promise to pay a specific amount of money, usually with interest, by a certain date.

Borrower

An individual or entity that takes money or property from another under an agreement to return it or its equivalent at a future date.