Question & Answer: Stephanie’s company uses a job-order cost system. Stephanie just made a $15,000 debit to the Work in Process Inventory account for…..

Stephanie’s company uses a job-order cost system. Stephanie just made a $15,000 debit to the Work in Process Inventory account for raw materials assigned to job 1074. Which of the following steps does Stephanie also need to complete?

A : Posting a $15,000 decrease in Direct Labor to the subsidiary ledger for job 1074.

B : Posting a $15,000 increase in Direct Materials to the job cost sheet for job 1074.

C : Posting a $15,000 increase in Direct Labor to the job cost sheet for job 1074.

D : Posting a $15,000 increase in Raw Materials to the subsidiary ledger for job 1074.

Expert Answer

 

When costs are assigned to Jobs, material account of the respective job will be debited. Assigning these costs to job will decrease inventory balance.

Hence, correct option is B : Posting a $15,000 increase in Direct Materials to the job cost sheet for job 1074.

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