Sousa Corporation Uses a Standard Cost System in Which Inventories

question 24

Multiple Choice

Sousa 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 standards for direct materials for the company's only product specify 2.8 kilos per unit at $7.50 per kilo or $21.00 per unit.During the year,the company purchased 82,100 kilos of raw material at a price of $7.40 per kilo and used 78,020 kilos of the raw material to produce 27,900 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 raw materials used in production are recorded,which of the following entries will be made?

• A) $750 in the Materials Quantity Variance column
• B) $750 in the Materials Price Variance column
• C) ($750) in the Materials Quantity Variance column
• D) ($750) in the Materials Price Variance column

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Definitions:

Ordered Schedule

A predetermined schedule for carrying out activities, treatments, or medication administration in healthcare, ensuring consistency and timeliness.

IV Flow Rates

The speed at which intravenous fluid is administered to a patient, typically measured in milliliters per hour (mL/hr).

DA Equations

Differential Algebraic Equations, mathematical equations for systems that contain both differential and algebraic components.

Milliliters Per Hour

A volumetric flow rate measurement, often used in medical IV fluid administration, defining the number of milliliters delivered over the course of an hour.