On April 1, Stelter Corporation had $34,000 of raw materials on hand. During the

Question

On April 1, Stelter Corporation had $34,000 of raw materials on hand. During the month, the company purchased an additional $60,000 of raw materials. During April, $70,000 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 $7,000. Prepare journal entries to record these events. Use these journal entries to answer the following questions: The credits to the Manufacturing Overhead account as a consequence of the raw materials transactions in April total: A) $0 B) $70,000 C) $63,000 D) $7,000

Explanation / Answer

Debit Raw Materials Inventory $60,000
Credit Accounts Payable (or Cash) $60,000

Debit Work in Process Inventory $63,000
Debit Factory Overhead $7,000
Credit Raw Materials Inventory $70,000

The debits to the Manufacturing Overhead account as a consequence of the raw materials transactions in April total: $63,000+$7,000 = $70,000

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