When the Actual Amount of a Raw Material Used in Production

question 17

Multiple Choice

When the actual amount of a raw material used in production is less than the standard amount allowed for the actual output, the journal entry would include:

• A) Debit to Raw Materials; Credit to Materials Quantity Variance
• B) Debit to Work-In-Process; Credit to Materials Quantity Variance
• C) Debit to Raw Materials; Debit to Materials Quantity Variance
• D) Debit to Work-In-Process; Debit to Materials Quantity Variance

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Definitions:

Standard Deviation

A statistic that measures the dispersion or variation of a set of values from their mean.

Average

A statistical measure representing the central or typical value in a set of data, calculated by dividing the sum of all values by the number of values.

Bayesian Statistics

A statistical method that applies probability to statistical problems, involving prior knowledge as well as current evidence.

Prior Knowledge

Refers to the information and understanding a person already has before learning new information.