For the following accounts, indicate what causes the account to increase and decrease. The first account is completed as an example. (Abbreviation used: OH=overhead) Account Is increased by: Is decreased by:
Raw Materials Inventory Materials purchased Materials used
Work-in-Process Inventory
Adjustment for over/under allocation of OH Completion of jobs Direct labor incurred Direct materials used Manufacturing overhead allocated Materials purchased Materials used Shipping sold jobs
Table of accounts
Account Is increased by: Is decreased by:
Raw Materials Inventory Materials purchased Materials used
Work-in-Process Inventory
Finished Goods Inventory
Cost of Goods Sold

Answer and Explanation:

The causes of the account to increase and decrease is shown below:-

Account                               Is increased by               Is decreased by

Raw material inventory     Material purchased        Material used

Work-in-progress

inventory                            Direct material used       Completion of jobs

                                           Direct labor incurred

                                           MOH allocated  

Finished goods

inventory                        Completion of jobs         Shipping sold jobs

Cost of goods sold       Shipping sold jobs          Adjustment for over/under

                                                                                allocation of OH

                                   Adjustment for over or under

                                          allocation of OH

The above shows the increment and decrement of each item and the same is being considered

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