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:

Prisoner's Dilemma Game

A paradox in decision analysis in which two individuals acting in their own self-interest do not produce the optimal outcome, illustrating conflicts between individual and collective rationality.

Competing

The act of participating in an event or contest with the aim of winning or achieving superiority over others.

Prisoner's Dilemma Game

A classic example of game theory that illustrates why two individuals might not cooperate, even if it appears that it is in their best interest to do so.

Communication

The process of transmitting information, ideas, emotions, skills, and knowledge from one entity or person to another.