Signore Corporation Uses a Standard Cost System in Which Inventories

question 36

Multiple Choice

Signore Corporation uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.The standard cost card for the company's only product is as follows:
During the year,the company purchased 34,600 gallons of raw material at a price of $9.10 per gallon and used 30,050 gallons of the raw material to produce 20,100 units of work in process.
Assume that all transactions are recorded on a worksheet as shown in the text.On the left-hand side of the equals sign in the worksheet are columns for Cash,Raw Materials,Work in Process,Finished Goods,and PP&E (net) .All of the variance columns are on the right-hand-side of the equals sign along with the column for Retained Earnings.
When the purchase of raw materials is recorded,which of the following entries will be made?

• A) $3,460 in the Materials Quantity Variance column
• B) ($3,460) in the Materials Price Variance column
• C) $3,460 in the Materials Price Variance column
• D) ($3,460) in the Materials Quantity Variance column

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Definitions:

Process Innovations

Improvements or new methods introduced in the production or delivery process of goods and services.

New Product Introductions

The process of bringing a new product to the market, including development, marketing, and commercialization phases.

Existing Product Improvements

Enhancements made to products already available in the market to increase their value, functionality, or appeal to consumers.

Process Innovation

The adoption of a novel or substantially enhanced method for producing or distributing offerings in business processes.