Malkovich Company Uses a Standard Costing System

question 2

Multiple Choice

Malkovich Company uses a standard costing system. The following information pertains to direct materials for the month of July: Malkovich Company reports its material price variances at the time of purchase.
What is the journal entry to record material purchases?

• A) Materials 55,800 Materials Price Variance 4,650 Accounts Payable 51,150
• B) Accounts Payable 55,800 Materials 55,800
• C) Materials 55,800 Accounts Payable 55,800
• D) Materials 51,150 Materials Price Variance 4,650 Accounts Payable 55,800

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Definitions:

Output Contract

A legal agreement in which a seller agrees to sell all the production to a particular buyer, who in turn agrees to purchase the entire output.

Needs Contract

A contract or agreement tailored to address and fulfill specific needs of the parties involved.

Good Faith

Acting with honest intentions without seeking to take unfair advantage in a transaction or situation.

Rule Of Requirements

A principle in contract law that dictates a seller must supply only the quantity of goods that a buyer requires, no less and no more.