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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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When materials are requisitioned for use in production in a job-order costing firm, the cost of materials is added to the

  1. a. raw materials account.
  2. b. work-in-process account.
  3. c. finished goods account.
  4. d. accounts payable account.
  5. e. cost of goods sold account.

To determine

Identify the account to which the cost of requisitioned materials for production is added in a job-order costing firm.

Explanation

Work-in-Process:

The unfinished products, which need to be transformed into finished products at the end of a period, are known as work-in-process. The ending balance of work-in-process account is calculated by summing the totals of the open job-order cost sheets.

b.

Material requisitioned for use in production is included in work in process because all the incomplete jobs are part of it. Therefore, option b is the correct answer.

a.

Material cost is subtracted from the raw materials accounts when they are requisitioned for use in the production...

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