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Six jobs use materials of $880, $1,240, $670, $2,300, $1,560 and $910, and a further $270 of materials goes to general factory use. What amount is debited to Work in Process?
A$7,830
B$7,560
C$7,290
D$8,100
Answer & Solution
Correct answer: B. $7,560
1. Only materials that become part of a job are direct, and only those reach Work in Process.
2. Adding the six job amounts gives $880 plus $1,240 plus $670 plus $2,300 plus $1,560 plus $910, which is $7,560.
3. Work in Process is debited $7,560 and Materials is credited for the same amount.
4. The $270 for general factory use is indirect, so Factory Overhead is debited for it separately.
5. $7,830 wrongly folds the indirect $270 into the direct materials debit.
_Source: Jonick, Principles of Managerial Accounting (UNG Press, CC BY-SA 4.0), section 2.2 Comprehensive Example of Job Order Costing Transactions for a Manufacturing Company_
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