Atlace Manufacturing Uses a Standard Cost System The Company Plans to Produce 3,000 Units and Has Purchased

question 50

Multiple Choice

Atlace Manufacturing uses a standard cost system.Standards for direct materials are as follows: $$\begin{array} { | l | r | } \hline \text { Direct materials (pounds per unit of output) } & 3 \\\hline \text { Cost per pound of direct materials } & \$ 6 \\\hline\end{array}$$ The company plans to produce 3,000 units and has purchased 15,000 pounds of direct materials at a net cost of $42,600.What is the journal entry to record this transaction?

• A) \[\begin{array} { | c | r | r | }
• \hline \text { Raw Materials Inventory } ( 15,000 \text { pounds } \times \$ 6 / \text { pound } ) & 90,000 & \\
• \hline \text { Direct Materials Cost Variance } & & 47,400 \\
• \hline \text { Accounts Payable } ( 15,000 \text { pounds } \times \$ 2.84 / \text { pound) } & & 42,600 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | r | r | }
• \hline \text { Raw Materials Inventory } ( 15,000 \text { pounds } \times \$ 6 / \text { pound } ) & 90,000 & \\
• \hline \text { Direct Materials Cost Variance } & 47,400 & \\
• \hline \text { Accounts Payable } ( 15,000 \text { pounds } \times \$ 2.84 / \text { pound } ) & & 42,600 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | r | r | }
• \hline \text { Raw Materials Inventory } ( 15,000 \text { pounds } \times \$ 2.84 / \text { pound } ) & 42,600 & \\
• \hline \text { Direct Materials Cost Variance } & 47,400 & \\
• \hline \text { Accounts Payable } ( 15,000 \text { pounds } \times \$ 6 / \text { pound) } & & 90,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | r | r | }
• \hline \text { Raw Materials Inventory } ( 15,000 \text { pounds } \times \$ 2.84 / \text { pound } ) & 42,600 & \\
• \hline \text { Direct Materials Cost Variance } & & 47,400 \\
• \hline \text { Accounts Payable } ( 15,000 \text { pounds } \times \$ 6 / \text { pound) } & & 90,000 \\
• \hline
• \end{array}\]

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Definitions:

Dummy Variables

Numerical variables used in regression analysis to represent subgroups of the sample in a binary form.

Indicator Variable

A variable used in statistics that takes the value 1 to indicate the presence of a certain condition and 0 to indicate its absence.

Nominal Variables

Categorical variables that have two or more categories without having a natural order or rank.

College Major

The specialized area of study or field chosen by a college or university student to focus their academic coursework and degrees.