Reference: 21_01
Five Rings, Inc, Has Collected the Following Data

question 88

Multiple Choice

Reference: 21_01
Five Rings, Inc, has collected the following data on one of its products:
$\begin{array}{ll}\text { Direct materials standard (4 lbs. @ \$1/lb.) } & \$ 4 \text { per finished unit } \\\text { Total direct materials cost variance-unfavorable } & \$ 13,750 \\\text { Actual direct materials used } & 150,000 \mathrm{lbs} . \\\text { Actual finished units produced } & 30,000 \text { units }\end{array}$
-The entry to record the material variances would include a:

• A) Credit to Goods in Process for $133,750.
• B) Debit to Direct Material Price Variance for $13,750.
• C) Credit to Direct Material Quantity Variance for $13,750.
• D) Debit to Goods in Process for $120,000.
• E) Debit to Raw Materials for $120,000.

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Definitions:

Stockholders

Individuals or institutions that own shares in a corporation, making them owners of the company.

Equity

The value of an owner's interest in a property, calculated by subtracting liabilities from the value of the asset.

Liabilities

Debts or economic duties a business has to external parties, requiring repayment through the exchange of money, goods, or services over a period.

Assets

Resources owned by a company or individual that have economic value or potential to provide future benefits.