Reference: 21_01
Five Rings, Inc, Has Collected the Following Data

question 88

Multiple Choice

Reference: 21_01
Five Rings, Inc, has collected the following data on one of its products:
$\begin{array}{ll}\text { Direct materials standard (4 lbs. @ \$1/lb.) } & \$ 4 \text { per finished unit } \\\text { Total direct materials cost variance-unfavorable } & \$ 13,750 \\\text { Actual direct materials used } & 150,000 \mathrm{lbs} . \\\text { Actual finished units produced } & 30,000 \text { units }\end{array}$
-The entry to record the material variances would include a:

• A) Credit to Goods in Process for $133,750.
• B) Debit to Direct Material Price Variance for $13,750.
• C) Credit to Direct Material Quantity Variance for $13,750.
• D) Debit to Goods in Process for $120,000.
• E) Debit to Raw Materials for $120,000.

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Definitions:

Stock Price

The cost of purchasing a share of a company’s stock in the stock market.

Asset Turnover Ratio

A financial metric that measures the efficiency of a company in using its assets to generate sales revenue.

Times Interest Earned

A financial ratio that measures a company's ability to meet its debt obligations by comparing its income before interest and taxes to its interest expenses.

Earnings Per Share

A financial metric that indicates the portion of a company's profit allocated to each outstanding share of common stock, used as an indicator of the company's profitability.