River Falls Manufacturing uses a normal cost system and had the following data a

Question

River Falls Manufacturing uses a normal cost system and had the following data available for 2018: Direct materials purchased on account Direct materials requisitioned Direct labor cost incurred Factory overhead incurred Cost of goods completed Cost of goods sold Beginning direct materials inventory Beginning WIP inventory Beginning finished goods inventory Overhead application rate, as a percent of direct - labor costs $152,000 89,000 129,000 149,000 286,000 251,000 27,000 68,000 54,000 145 percent O A. debit to Direct Materials Inventory for $152,000 O B. credit to WIP Inventory for $89,000 O C. credit to Direct Materials Inventory for $89,000 O D. debit to WIP Inventory for $152,000 Click to select your answer

Explanation / Answer

Answer A is correct.

Direct material purchased on account will be debited to direct material inventory and credited to accounts payable.

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