Chapter 19, Problem S19.3SE

To determine

Treatment of Direct material/ Indirect material:

The Material used in the manufacturing process is in the form of direct material (which is directly identified in the product) and indirect material used (which is indirectly consumed and not directly identified in the product). The Cost of Direct material is charged directly to work in process inventory by debiting the in process account and crediting the raw material inventory account.

And the indirect material issued is charged to manufacturing overheads account and then applied to work in process indirectly along with other indirect cost on some pre-determined basis.

Requirement:

The Journal entries for transactions relating to raw material and ending balance to be computed.