Baldwin, Inc Uses a Standard Job Cost System and Purchased

question 73

Multiple Choice

Baldwin, Inc uses a standard job cost system and purchased 25,000 kg of material at $6 per kg, and used it all. The standard amount allowed for the output achieved is 22,500 kg, and the standard price is $6.50 per kg. The company also incurred 37,500 direct labour hours for $450,000. The standard hourly price was $11 per hour, and 39,000 hours were allowed at standard. Assuming all variances are immaterial, answer the following questions:
The entry to record the direct material efficiency variance will include a;

• A) Debit to work in process inventory for $146,250
• B) Credit to the efficiency variance for $16,250
• C) Credit to the efficiency variance for $12,500
• D) Credit to materials inventory for $150,000

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Definitions:

Systematic Risk

The inherent risk that affects the overall market, not diversified away by holding a broad portfolio.

Bank of Canada

The central bank of Canada, responsible for issuing currency, managing the country's monetary policy, and regulating its financial system.

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The cost of borrowing money or the return on savings, usually expressed as a percentage of the amount borrowed or saved.

Portfolio Beta

A measure of the volatility, or systematic risk, of a portfolio in comparison to the market as a whole, indicating how much the investment’s value is expected to fluctuate.