Atoka Manufacturing Uses a Standard Cost System Actual Purchases of Direct Materials for the Current Month Are

question 197

Multiple Choice

Atoka Manufacturing uses a standard cost system. Standards for direct materials are as follows: $$\begin{array} { | l | r | } \hline \text { Direct materials (pounds per unit of output) } & 2 \\\hline \text { Cost per pound of direct materials } & \$ 6 \\\hline\end{array}$$ Actual purchases of direct materials for the current month are 10,000 pounds for $50,400. Planned and actual production for the month is 3000 units. Atoka has issued 10,000 pounds of direct materials to production. The journal entry to record this transaction is ________.

• A) a debit to Work-in-Process Inventory for $30,240, a credit to Raw Materials Inventory for $36,000, and a debit to Direct Materials Efficiency Variance for $5760
• B) a debit to Work-in-Process Inventory for $30,240, a credit to Raw Materials Inventory for $60,000, and a debit to Direct Materials Efficiency Variance for $29,760
• C) a debit to Work-in-Process Inventory for $36,000, a credit to Raw Materials Inventory for $60,000, and a debit to Direct Materials Efficiency Variance for $24,000
• D) a debit to Work-in-Process Inventory for $60,000, a credit to Raw Materials Inventory for $50,400, and a credit to Direct Materials Efficiency Variance for $9600

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