A furniture manufacturing job is building a custom made wardrobe for a customer. For the job, they fill out a requisition form with the following: $1,200 worth of wood to make the base, $700 worth of glass for the doors, and $400 worth of cleaning supplies. Which of the following would be included in the journal entry?

Question

BlackTom AI · Accepted Answer

To evaluate the journal entry for requisitioning materials for a job, we must separate direct materials, indirect materials (overhead), and the overall movement from Raw Materials Inventory to Work-in-Process.
Option 1: Debit: Manufacturing Overhead $400
This represents recording the indirect materials (cleaning supplies) as overhead. It is correct to debit Manufacturing Overhead for the $400 since cleaning supplies are not directly traceable to the wardrobe (they are overhead). However, on the same requisition, you would also debit Work-in-Process Inventory for the direct materials (the wood and glass) and credit Raw Materials Inventory for the total amount, so this option is incomplete by itself.
Option 2: Debit: Raw Materials Inventory $2,300
When materials are requisitioned to production, Raw Materials Inventory is decreased (credited), not increased (debited). Therefore debiting Raw Materials Inventory would be incorrect for this event; the accounting typically moves material out of Raw Materials Inventory, not into it.
Option 3: Credit: Work-in-Process Inventory $1,900
Work-in-Process Inventory is increased (debited) to reflect that direct materials are being put into work on the job. Crediting WIP would not occur in this step; that account is normally debited for the direct materials portion. So this credit entry is not appropriate for the requisition.
Option 4: Credit: Manufacturing Overhead $400
Manufacturing Overhead is typically debited when overhead is incurred and capitalized as overhead; it would be credited when overhead is applied to jobs or when over/underapplied balances are settled. In the basic requisition scenario, you would not credit overhead for the $400 as part of moving materials; rather, you would debit overhead (for the indirect portion) and debit WIP for the direct materials.
In summary, the most plausible choice among the options is Option 1 because it correctly identifies the need to debit Manufacturing Overhead for the indirect portion, even though the full journal entry would also include a Debit to Work-in-Process for the direct materials (and a Credit to Raw Materials Inventory for the total of $2,300). The other options misstate the direction of the accounts or omit the required corresponding entries, making them incorrect in the context of a requisition for a job order.

SP25 ACCTIS 211 001 Online Quiz #1: Chapters 14, 15, 17, 18 & 18A

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