Learning Objective 20-P3: Record the flow of production costs in process costing. Raw materlals purchases are debited to Raw materlals Inventory. Direct materlals used are debited to Work in process Inventory and credited to Raw materlals Inventory. Indirect materials used are debited to Factory overhead and credited to Raw materlals Inventory. Direct labor used is debited to Work In process Inventory and credited to Factory wages payable. Indirect labor used is debited to Factory overhead and credited to Factory wages payable. Other actual factory overhead costs are debited to Factory overhead. Estimated overhead costs are allocated, using a predetermined overhead rate, to the different processes. This allocated amount is credited to the Factory Overhead account and debited to the Work in Process Inventory account for each separate process. As units are finished, Finished goods Inventory is debited and Work In process is credited. Units sold are debited to Cost of goods sold and credited to Finished goods Inventory. Accounting for Factory Overhead Knowledge Check 01 The journal entry to record the use of utillties In a factory Includes which of the following: (You may select more than one answer. Single cllck the box with the questlon mark to produce a check mark for a correct answer and clouble cllck the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as Incorrect.) Debit to Factory Overhead Credit to Factory Overhead Debit to Factory Utilities Payable Credit to Factory Utilitles Payable Credit to Raw Materlals Credt to Factory Wages Payable