The subsidiary ledger for materials at Robinson Company—called Materials Records—is used to continuously record the quantity of materials received, issued to jobs, and the inventory balances for each type of material. Panel A of Exhibit 4-8 shows the Materials Record for Metal Brackets (Part No. MB 468-A). In many companies, the source documents supporting the receipt and issue of materials (the material requisition record in Exhibit 4-3, Panel A) are scanned into a computer. Software programs then automatically update the Materials Records and make all the necessary accounting entries in the subsidiary and general ledgers. The cost of materials received across all types of direct and indirect material records at the Robinson Company for February 2020 is $89,000 (Exhibit 4-8, Panel A). The cost of materials issued across all types of direct and indirect material records for February 2020 is $85,000 (Exhibit 4-8, Panel A).
As direct materials are used, they are recorded as issued in the Materials Records (see Exhibit 4-8, Panel A, for a record of the Metal Brackets issued for the WPP machine job). Direct materials are also charged to Work-in-Process Inventory Records for Jobs, which are the subsidiary ledger accounts for the Work-in-Process Control account in the general ledger. For example, the metal brackets used in the WPP machine job appear as direct material costs of $112 in the subsidiary ledger under the work-in-process inventory record for WPP 298 (Exhibit 4-9, Panel A, which is based on the job-cost record source document in Exhibit 4-2). The cost of direct materials used across all job-cost records for February 2020 is $81,000 (Exhibit 4-9, Panel A).
As indirect materials (for example, lubricants) are used, they are charged to the Manufacturing Department overhead records (Exhibit 4-8, Panel C), which comprise the subsidiary ledger for the Manufacturing Overhead Control account. The Manufacturing Department overhead records are used to accumulate actual costs in individual overhead categories by each indirect-cost-pool account in the general ledger. Recall that Robinson has only one indirect-cost pool: Manufacturing Overhead. The cost of indirect materials used is not added directly to individual job records. Instead, this cost is allocated to individual job records as a part of manufacturing overhead.