If Department J Uses $40,000 of Direct Materials and Department

question 30

True/False

If Department J uses $40,000 of direct materials and Department K uses $70,000 of direct materials,the following journal entry would be recorded by the process cost accounting system:
$\begin{array}{llr} \text { Raw Materials Inventory } &70,000\\ \text { Goods in Process Inventory, Department J } &40,000\\ \text { Goods in Process Inventory, Department K } &30,000\end{array}$

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Definitions:

Direct Materials

Raw materials that can be directly traced to the manufacturing of a product in a cost-effective manner.

Manufacturing Overheads

Indirect costs related to manufacturing that cannot be directly traced to specific products, including utilities, maintenance, and factory equipment depreciation.

Work-in-Process Inventory

Items that are partially completed in the production process; they are not yet finished goods but are no longer raw materials.

Schedule of Cost of Goods Sold

A detailed statement showing the direct costs, indirect costs, and total cost of goods that have been sold during a specific period.