Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for direct material usage is:

Direct materials used $107,000

Direct labor used $180,000

Predetermined overhead rate (based on direct labor) 163%

Goods transferred to finished goods $452,000

Cost of goods sold $464,000

Credit sales $1,010,000

a. Debit Raw Materials Inventory $87,000; credit Accounts Payable $87,000.

b. Debit Raw Materials Inventory $87,000; credit Finished Goods Inventory $87,000.

c. Debit Cost of Goods Sold $87,000; credit Finished Goods Inventory $87,000.

d. Debit Work in Process Inventory $87,000; credit Raw Materials Inventory $87,000.

e. Debit Work in Process Inventory $87,000; credit Cost of Goods Sold $87,000.

Question

Zachary Prince

Business

26 September, 04:25

Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for direct material usage is:

Direct materials used $107,000

Direct labor used $180,000

Predetermined overhead rate (based on direct labor) 163%

Goods transferred to finished goods $452,000

Cost of goods sold $464,000

Credit sales $1,010,000

a. Debit Raw Materials Inventory $87,000; credit Accounts Payable $87,000.

b. Debit Raw Materials Inventory $87,000; credit Finished Goods Inventory $87,000.

c. Debit Cost of Goods Sold $87,000; credit Finished Goods Inventory $87,000.

d. Debit Work in Process Inventory $87,000; credit Raw Materials Inventory $87,000.

e. Debit Work in Process Inventory $87,000; credit Cost of Goods Sold $87,000.

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Answers (1)

Know the Answer?

Aaden Joyce · Answer 1

d. Debit Work in process inventory $107,000; Credit Raw material inventory $107,000

Explanation:

When issuing out raw material it goes to work in process, Raw material is an asset account therefore decreasing on the credit side.

The amount of $87,000 on the options is incorrect. The correct amount is $107,000 used.