Rees Manufacturing Uses a Standard Cost System

question 74

Multiple Choice

Rees Manufacturing uses a standard cost system.Standards for direct materials are as follows:

Actual purchases of direct materials for the current month are 10,000 pounds for $51,600.Planned and actual production for the month is 3,000 units.Rees 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 $30,960,a credit to Raw Materials Inventory for $36,000,and a debit to Direct Materials Efficiency Variance for $5,040
• B)a debit to Work-in-Process Inventory for $30,960,a credit to Raw Materials Inventory for $60,000,and a debit to Direct Materials Efficiency Variance for $29,040
• 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 $51,600,and a credit to Direct Materials Efficiency Variance for $60,000

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Definitions:

Job Evaluation Method

A systematic process for determining the relative worth of jobs within an organization by analyzing their duties, responsibilities, and requirements.

Compensable Factors

Elements of a job that are used to determine appropriate compensation, such as skill level, effort, responsibility, and working conditions.

Skills

Abilities and expertise that individuals possess, which enable them to perform tasks effectively.

Responsibilities

Duties or tasks that an individual or organization is expected to handle or carry out.