A Manufacturer Using Standard Costing System Has Purchased Raw Material

question 119

Essay

A manufacturer using standard costing system has purchased raw material of 250 units at the actual cost of $2 per unit. The standard cost per unit of raw material is $1.85. Give journal entry to record the material cost variance at the time of purchase.

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Definitions:

Cash Discount

A discount given for a cash purchase.

Cost Of Goods Sold

The direct costs attributed to the production of goods sold by a company, including materials and labor.

Expensive Financing

Funding options for companies or individuals that come with high costs, often due to high interest rates or fees.

Credit Periods

The time frame allowed by a seller for a buyer to pay for goods or services received, usually measured in days.