If the Standard Quantity of Materials Is 84,500 Units @

question 25

Multiple Choice

If the standard quantity of materials is 84,500 units @ $0.15 per unit and the actual quantity is 95,000 units @ $0.12 per unit,then the journal entry to record the cost of materials used includes:

• A)A debit to Work in Process Inventory of $11,400.
• B)A debit to Work in Process Inventory of $12,675.
• C)A debit to Materials Price variance of $2,850.
• D)A credit to Materials Price variance of $1,575.

---

Definitions:

Process Costing System

A costing method used in industries where production is continuous, assigning costs to units of product based on the process they go through.

Direct Materials

The raw materials that are used directly in the manufacturing of a product and can be easily traced to it.

Journal Entry

A record in the accounting journal that represents a business transaction, including information such as the date, accounts affected, and amounts debited and credited.

Process Costing System

An accounting system used to evaluate the cost associated with a production process that continuously produces homogeneous products.