Atoka Manufacturing Uses a Standard Cost System Actual Purchases of Direct Materials for the Current Month Are

question 173

Multiple Choice

Atoka Manufacturing uses a standard cost system.Standards for direct materials are as follows: $\begin{array}{|l|r|}\hline \text { Direct materials (pounds per unit of output) } & 2 \\\hline \text { Cost per pound of direct materials } & \$ 5 \\\hline\end{array}$ Actual purchases of direct materials for the current month are 10,000 pounds for $48,000.Planned and actual production for the month is 3000 units.Atoka has issued 10,000 pounds of direct materials to production.The journal entry to record this transaction is ________.

• A) a debit to Work-in-Process Inventory for $28,800, a credit to Raw Materials Inventory for $30,000, and a debit to Direct Materials Efficiency Variance for $1200
• B) a debit to Work-in-Process Inventory for $28,800, a credit to Raw Materials Inventory for $50,000, and a debit to Direct Materials Efficiency Variance for $21,200
• C) a debit to Work-in-Process Inventory for $30,000, a credit to Raw Materials Inventory for $50,000, and a debit to Direct Materials Efficiency Variance for $20,000
• D) a debit to Work-in-Process Inventory for $50,000, a credit to Raw Materials Inventory for $48,000, and a credit to Direct Materials Efficiency Variance for $2000

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Definitions:

Valued Employees

Individuals within an organization considered essential due to their skills, performance, and contribution to the company's goals.

Marketing Era

A period marked by the evolution of marketing focus from production to product orientation, and eventually to a marketing orientation that emphasizes understanding and satisfying customer needs.

Production Era

A historical period in business where the focus was primarily on production efficiency and manufacturing output, often at the expense of customer needs.

Consumer Oriented

Refers to a business approach that prioritizes understanding and meeting the specific needs and wants of consumers.