Seafarer Company Established a Standard Direct Materials Cost of 1

question 64

Multiple Choice

Seafarer Company established a standard direct materials cost of 1.5 gallons at $2 per gallon for one unit of its product.During the past month,actual production was 6,500 units.The material quantity variance was $700 favorable and the material price variance was $470 unfavorable.The entry to charge Work in Process Inventory for the standard material costs during the month and to record the direct material variances in the accounts would include all of the following except:

• A)A debit to Work in Process for $19,500.
• B)A credit to Raw Materials for $19,270.
• C)A debit to Direct Material Price Variance for $470.
• D)A credit to Direct Material Quantity Variance for $700.
• E)A debit to Cost of Goods Sold for $230.

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Definitions:

CAFR

Comprehensive Annual Financial Report; a set of government financial statements that goes beyond the requirements of generally accepted accounting principles, including details on all funds and activities.

Introductory

Refers to the initial stage or beginning phase of a process, policy, or product.

Modified Approach

An alternative accounting method allowing certain assets to be reported at historical cost rather than being continuously adjusted for market valuation.

Infrastructure Assets

Long-term physical assets that are foundational for providing public services, such as roads, bridges, water systems, and utilities.