In job-order costing,a Debit to Work-In-Process Inventory is used to record ________.
A) a sale of merchandise
B) a purchase of direct materials
C) the cost of goods completed
D) a requisition of direct materials for production area

Question

Quizplus · Accepted Answer

A job-order costing system is used by companies that produce unique, custom-made products, such as furniture, custom machinery, or specialized equipment. In this system, costs are accumulated by job or product. A debit to Work-In-Process (WIP) Inventory account is used to record the costs of direct materials, direct labor, and manufacturing overhead that are used in the production process. Therefore, option D, a requisition of direct materials for the production area, is the correct answer. The other options are not applicable to the entry in the WIP Inventory account.

In Job-Order Costing,a Debit to Work-In-Process Inventory Is Used to Record