Question

Portside Watercraft uses a job order costing system. During one month Portside purchased $173,000 of raw materials on credit; issued materials to production of $164,000, of which $24,000 were indirect. Portside incurred a factory payroll cost of $95,000, of which $25,000 was indirect labor. Portside uses a predetermined overhead rate of 170% of direct labor cost. The journal entry to record the issuance of materials to production is:

Answer 1

The journal entry to record the issuance of materials to production for Portside Watercraft includes debiting Work in Process for direct materials, debiting Manufacturing Overhead for indirect materials, and crediting Materials Inventory for the total amount issued.

Step-by-step explanation:

The journal entry to record the issuance of materials to production for Portside Watercraft, which uses a job order costing system, would involve debiting Work in Process for the direct materials and debiting Manufacturing Overhead for the indirect materials, while crediting Materials Inventory for the total materials issued. Since $164,000 of materials were issued to production with $24,000 being indirect, the entry would be:

• Debit Work in Process $140,000 (which is $164,000 - $24,000 of indirect materials)
• Debit Manufacturing Overhead $24,000
• Credit Materials Inventory $164,000

Answer 2

Debit Work in Process Inventory $140,000

Debit Factory Overhead $24,000

Credit Raw Materials Inventory $164,000.

Step-by-step explanation:

Preparation of The journal entry to record the issuance of materials to production

Based on the information given The journal entry to record the issuance of materials to production is:

Debit Work in Process Inventory $140,000

($164,000-$24,000)

Debit Factory Overhead $24,000

Credit Raw Materials Inventory $164,000

(To record the issuance of materials to production)