ABC Company uses a Materials Inventory account to record both direct and indirect materials. ABC charges direct materials to WIP, while indirect materials are charged to the Factory Overhead account. During the month of April, the company has the following cost information:
Total materials (direct and indirect) purchased | $ | 93,200 | ||
Indirect materials issued to production | 27,100 | |||
Total materials issued to production | 119,000 | |||
Beginning materials inventory | 52,900 | |||
The amount of direct materials issued is:
The amount of direct materials issued is: = 11,9000-27,100 = $91,900
The amount of direct materials issued is = Total materials issued to production - Indirect Materials issued to production.
Materials are charged to production - Direct materials to WIP and Indirect materials to Factory Overheads.
Now total issue and Issue to factory are given, the difference is the Direct materials issued to WIP
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