Question

Which of the following journal entries correctly records the current month's activity where $60,000 of direct material and $17,000 of indirect materials were used in the production process?A.. Raw Materials Inventory 77,000 Goods in Process Inventory 60,000Factory Overhead 17,000B. Goods in Process 77,000 Raw Materials Inventory 77,000C. Goods in Process 17,000 Factory Overhead 60,000 Cash 77,000D. Goods in Process 60,000 Factory Overhead 17,000 Raw Materials Inventory 77,000E. Raw Materials Inventory 77,000 Cash 77,000

Answer 1

Answer: The correct answer is D.

Explanation: We must record the passage of direct materials to the goods in process account and record the passage of indirect materials as factory overheads, therefore we debit "Goods in process" for 60000, and "factory overhead" for 17000 And we cancel the inventory account of these materials by crediting "raw materials".

The registration would be:

Goods in process     60000

Factory overhead      17000

        Raw Materials                 77000