Adelphia Manufacturing Issued $75,000 of Direct Materials and $8,000 of Indirect

question 38

Multiple Choice

Adelphia Manufacturing issued $75,000 of direct materials and $8,000 of indirect materials for production.Which of the following journal entries would correctly record the transaction?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Raw Materials Inventory } & 83,000 & \\
• \hline \text { Finished Goods Inventory } & & 75,000 \\
• \hline \text { Work-in-Process Inventory } & & 8,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | r | }
• \hline \text { Work-in-Process Inventory } & 83,000 & \\
• \hline \text { Raw Materials Inventory } & & 83,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | r | r | }
• \hline \text { Work-in-Process Inventory } & 75,000 & \\
• \hline \text { Manufacturing Overhead } & 8,000 & \\
• \hline \text { Raw Materials Inventory } & & 83,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Manufacturing Overhead } & 83,000 & \\
• \hline \text { Raw Materials Inventory } & & 83,000 \\
• \hline
• \end{array}\]

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Definitions:

Activity Variance

The difference between the planned activity level of cost-driving activities and the actual level incurred, impacting the budget or costing analysis.

Materials

Items or substances used in the production or manufacturing of goods.

Personnel Expenses

Costs associated with employing personnel, including wages, benefits, training, and other related expenses.

Spending Variance

A metric that compares the actual cost of production against the budgeted or standard cost, highlighting over or under spending.