Final answer:
The journal entry for moving direct materials from raw materials into production involves debiting Work in Process Inventory and crediting Raw Materials Inventory, reflecting the usage of materials in the production process.
Step-by-step explanation:
The step in job cost flow where raw materials are moved into production and direct materials are released from raw materials inventory is reflected in a typical manufacturing company's accounting records with a journal entry.
This journal entry makes sure that the cost of direct materials used in production is accurately tracked and allocated. The corresponding journal entry to record the release of direct materials from raw materials into production would typically involve a debit to the Work in Process (WIP) Inventory account and a credit to the Raw Materials Inventory account.
The journal entry appears as follows:
- Debit: Work in Process Inventory
- Credit: Raw Materials Inventory
This entry transfers the cost of the raw materials directly traceable to the product from the Raw Materials Inventory to the Work in Process Inventory, reflecting their consumption in the production process.