Allan Company Manufactures Overalls -Refer to the Figure

question 142

Multiple Choice

Allan Company manufactures overalls. During the year, it manufactured 125,000 overalls, using 2.9 hours of direct labour at a rate of $6.25 per hour. The materials and labour standards for manufacturing the overalls are as follows:
Allan required 600,000 m at $1.95 per metre to make the 125,000 overalls.
$\begin{array}{lll}\text {Direct materials ( \( 5 \mathrm{~m} \) of denim \( (012 \) per metre) }&\$10\\\text { Direct labour (3 hours \( @ \$ 6 \) per hour) }&18\\\end{array}$

-Refer to the Figure.What is the entry to record the purchase of materials?

• A)Materials 1,218,750Materials Price Variance 31,250Accounts Payable 1,250,000
• B)Materials 1,170,000Materials Price Variance 30,000Accounts Payable 1,200,000
• C)Materials 1,200,000Materials Price Variance 30,000Accounts Payable 1,170,000
• D)Materials 1,250,000Materials Price Variance 31,250Accounts Payable 1,218,750

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