Minstrel Manufacturing Uses a Job Order Costing System

question 37

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

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