(Solved) Atlace Manufacturing uses a standard cost system. Standards for direct materials are as ...

Atlace Manufacturing uses a standard cost system. Standards for direct materials are as follows:

Direct materials (pounds per unit of output)   3
Cost per pound of direct materials   $4

The company plans to produce 3,000 units and has purchased 12,000 pounds of direct materials at a net cost of $43,200. What is the journal entry to record this transaction?

A) Raw Materials Inventory (12,000 pounds × $3.60/pound)    43,200
Direct Materials Cost Variance   4,800
Accounts Payable (12,000 pounds × $4/pound)      48,000

B) Raw Materials Inventory (12,000 pounds × $4/pound)    48,000
Direct Materials Cost Variance   4,800
Accounts Payable (12,000 pounds × $3.60/pound)      43,200

C) Raw Materials Inventory (12,000 pounds × $4/pound)    48,000
Direct Materials Cost Variance      4,800
Accounts Payable (12,000 pounds × $3.60/pound)      43,200

D) Raw Materials Inventory (12,000 pounds × $3.60/pound)    43,200
Direct Materials Cost Variance      4,800
Accounts Payable (12,000 pounds × $4/pound)      48,000

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Atlace Manufacturing uses a standard cost system. Standards for direct materials are as ...

Horngren's Financial & Managerial Accounting, The Financial Chapters

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