Question

On November 1, Arvelo Corporation had $32,000 of raw materials on hand. During the month, the company purchased an additional $78,000 of raw materials. During November, $95,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $3,000.Prepare journal entries to record these events. Use those journal entries to answer the following questions: The debits to the Manufacturing Overhead account as a consequence of the raw materials transactions in November total: $95,000 $3,000 $0 $92,000

Answer 1

Answer:

$3,000

Explanation:

The journal entry for indirect materials should be:

• Dr Manufacturing Overhead expense 3,000
• Cr Raw Materials Inventory account 3,000

Indirect materials and indirect labor are debited to manufacturing overhead expense.

Since materials inventory is an asset account and it decreases, it must be credited.