The Journal Entry to Record the Use of Direct Materials

question 144

Multiple Choice

The journal entry to record the use of direct materials for Aztec Bromac is:

• A) \(\begin{array}{ll}
• \text { Dr Work in Process Inventory }&\$30,240\\
• \text { Cr DM Efficiency Variance } & \$ 3,240 \\
• \text { Cr Direct Materials Inventory } & \$ 27,000
• \end{array}\)
• B) \(\begin{array}{ll}
• \text { Dr Work in Process Inventory } & \$ 30,240 \\
• \text { Dr DM Efficiency Variance } & \$ 3,240\\
• \text { Cr Direct Materials Inventory }&\$33,480
• \end{array}\)
• C)\(\begin{array}{ll}
• \text {Dr Direct Materials Inventory }&\$30,240\\
• \text {Cr DM Efficiency Variance }&\$3,240\\
• \text {\( \mathrm{Cr} \) Work in Process Inventory}&\$27,000\\
• \end{array}\)
• D) \(\begin{array}{ll}
• \text { Dr Work in Process Inventory }&\$30,000\\
• \text { Cr DM Efficiency Variance } & \$ 3,240 \\
• \text { Cr Direct Materials Inventory } & \$ 26,760
• \end{array}\)

---

Definitions:

Direct Method

A cash flow statement preparation approach that lists major classes of gross cash receipts and payments.

Investing Activities

A section of the cash flow statement of a company which documents the buying and selling of long-term assets, including property, plant, and equipment.

Financing Activities

Transactions that result in changes in the size and composition of the equity capital or borrowings of the entity.

Operating Activities

Transactions related to the primary operations of the business, such as cash received from sales of goods or services.