If a Company Issues Raw Materials to Production at a Cost

question 55

Multiple Choice

If a company issues raw materials to production at a cost of $18900 when the standard cost is $18300 it will

• A) debit Materials Price Variance for $600.
• B) credit Materials Price Variance for $600.
• C) debit Materials Quantity Variance for $600.
• D) credit Material Quantity Variance for $600.

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Definitions:

Conversion Ratio

The number of shares an investor receives when converting a convertible security, like a convertible bond or preferred stock, into common stock.

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date at a specified price.

Call Option

A call option is a financial contract that gives the buyer the right, but not the obligation, to buy an asset at a specified price within a specific time period.

Convertible Bond

A type of bond that can be converted into a predetermined number of the issuing company's shares, typically at the discretion of the bondholder.