In a job order cost system using predetermined manufacturing overhead rates, indirect materials issued into production usually are recorded as an increase in
A)Work in Process Stock.
B)Finished Goods Stock.
C)Raw Materials Stock.
D)Manufacturing OverheaD.

Question

Quizplus · Accepted Answer

Indirect materials are not directly traceable to a specific job or product and therefore are considered part of manufacturing overhead. As such, the cost of indirect materials is included in the predetermined manufacturing overhead rate, and their issuance into production is recorded as an increase in Manufacturing Overhead.

In a Job Order Cost System Using Predetermined Manufacturing Overhead