Given the Following Account Balances at the End of the First

question 17

Multiple Choice

Given the following account balances at the end of the first year of operations: $$\begin{array} { l r } \text { Direct materials inventory } & \$ 60,000 \\\text { Work in process inventory } & 120,000 \\\text { Finished goods inventory } & 180,000 \\\text { Cost of goods sold } & 600,000 \\\text { Direct material price variance } & 65,000 \mathrm { U } \\\text { Direct material efficiency } & 195,000 \mathrm {~F}\end{array}$$ Assuming that variances are considered material, the entry and amount of the direct material price variance allocated to Cost of Goods Sold is:

• A) Debit $40,625
• B) Debit $41,082
• C) Credit $43,333
• D) Debit $39,935

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Definitions:

Encoding Specificity

The principle that suggests the ease of recall of a piece of information depends on the similarity of the encoding environment to the retrieval environment.

Retrieval Context

The situation or environment in which information is recalled, which can influence the ease and accuracy of the retrieval process.

Testing Effect

The enhanced memory performance and retention that results from being tested on material versus only studying it.

Cognitive Effort

The amount of mental processing power required to understand, process, and react to information.