Question Here are some basic data for Shannon Company: Cost of materials purchas

Question

Question Here are some basic data for Shannon Company:

Cost of materials purchases on account $72,600

Cost of materials requisitioned (includes $2400 of indirect) $53,000

Direct labor costs incurred $79,000

Manufacturing overhead costs incurred, including indirect materials $87,600

Cost of goods completed $256,750

Cost of goods sold $167,500

Beginning raw materials inventory 17,600

Beginning work in process inventory 33,900

Beginning finished goods inventory 35,700

Predetermined manufacturing overhead rate (as % of direct labor cost) 120%

The journal entry to record the cost of raw materials placed into production involves a

1. debit to Work-in-Process inventory account for $50,600.

2. debit to Overhead account for $50,600.

3. debit to Work-in-Process Inventory account for $53,000.

4. credit to Manufacturing Overhead account for $2400.

Explanation / Answer

The journal entry to record the cost of raw materials placed into production involves a

So answer is 1. debit to Work-in-Process inventory account for $50,600.

Date accounts & explanation debit credit Work in process a/c 50600 Manufacturing overhead a/c 2400 Raw materials a/c 53000 (To record transfer raw material)

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