Question

Andrew Industries purchased $165,000 of raw materials on account during the month of March. The beginning Raw Materials Inventory balance was $22,000, and the materials used to complete jobs during the month were $141,000 of direct materials and $13,000 of indirect materials. What journal entry should Andrew use to account for direct materials used in March:

Answer 1

WIP DEBIT 141,000

factory overhead DEBIT 13,000

Raw Materials Inventory CREDIT 154,000

Step-by-step explanation:

It will increase the work in process for the amount used into production of units.

It will debit factory overhead to later determinate the overapplied or underapplied overhead.

It will decrease raw materials inventory for the amount consumed during the period. This is the sum of both concepts, the direct and indirect.

The purchases, beginning inventory are not relevant information for this question.