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:

Task Goals

Specific objectives or targets set for tasks or activities, focusing on the completion and achievement of individual assignments.

Properly Set

Correctly established or arranged according to specified guidelines or principles.

Expectancy Theory

A motivational theory that suggests an individual's behavior is determined by their expected outcomes or rewards, based on the belief that effort leads to performance and performance leads to rewards.

High Instrumentality

The belief that performance will lead directly to desirable outcomes, an essential concept in expectancy theory of motivation.