Baldwin, Inc Uses a Standard Job Cost System and Purchased

question 129

Multiple Choice

Baldwin, Inc uses a standard job cost system and purchased 25,000 kg. of material at $6 per kg., and used it all. The standard amount allowed for the output achieved is 22,500 kg, and the standard price is $6.50 per kg. The company also incurred 37,500 direct labour hours for $450,000. The standard hourly price was $11 per hour, and 39,000 hours were allowed at standard. Assuming all variances are immaterial, answer the following questions: The entry to record the direct material price variance will include a:

• A)Debit to materials inventory for $150,000
• B)Debit to account payable for $162,500
• C)Credit to the price variance for $12,500
• D)Debit to the price variance for $16,250

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Definitions:

Demand

The quantity of a product or service that consumers are willing and able to buy at various prices.

Curds

Solid chunks created from milk during the cheese-making process when acids or enzymes cause milk proteins to coagulate.

Whey

A by-product of cheese production, rich in proteins and used in various food products and supplements.

Curds

Solid chunks or clumps that form in milk during the coagulation process, often as a precursor to cheese production.