Balt Company Maintains a Standard Cost System; as Such, All

question 68

Essay

Balt Company maintains a standard cost system; as such, all inventories, including materials, are carried on the books at standard cost. Last period, Balt used 5,000 pounds of Material H to produce 800 units of Product C8. The company has established a standard of 7 pounds of Material H per unit of C8, at a price of $7.50 per pound of material. During the period the inventory for Material H decreased by 2,000 pounds. The company spent $25,000 during the period to purchase material H.

Required:
1. Calculate the direct materials purchase-price variance for the period, rounded to the nearest dollar.
2. Calculate the direct materials usage variance for the period, rounded to the nearest whole dollar.
3. Provide the correct summary journal entry to record the purchase, on credit, of materials during the period.
4. Provide the correct summary journal to record direct materials cost for materials issued to production during the period.

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Definitions:

Psychoanalysis

A therapeutic approach developed by Freud that seeks to explore the unconscious motivations and conflicts underlying mental disorders.

Behavior Therapy

A type of psychotherapy that focuses on changing undesirable behaviors through conditioning and the establishment of new behaviors.

Self-Actualization

The process of realizing and fulfilling one's potential and capabilities, representing the highest level of psychological development in Maslow's hierarchy of needs.

Cognitive Therapist

A type of psychological therapist who focuses on changing unhelpful or unhealthy thought patterns, aiming to improve mental health and wellbeing.