Question 24:

A manufacturing company incurs $30,000 in direct materials costs and $25,000 in direct labor costs during a production period.

Requirements:

1. Record the journal entry to recognize the purchase of direct materials.

2. Post the journal entry to the Raw Materials Inventory account in the ledger.

3. Calculate the total manufacturing costs incurred.

4. Analyze how these costs contribute to the cost of goods sold.

5. Discuss the importance of controlling manufacturing costs for profitability.