James Inc.\'s flexible budget for June, based upon actual output, called for the
ID: 2500942 • Letter: J
Question
James Inc.'s flexible budget for June, based upon actual output, called for the use of 11,300 pounds of materials at a standard cost of $8.20 per pound. The Production Department actually used 11,500 pounds of materials costing $7.90 per pound during June.
$3,450 unfavorable.
$3,390 favorable.
$3,450 favorable.
$3,390 unfavorable.
The materials quantity variance for James's June operations is:
$3,390 favorable.
$3,450 unfavorable.
$1,640 unfavorable.
$3,450 favorable.
The journal entry to record the cost of direct materials used in June includes each of the following except:
A debit to Materials Quantity Variance of $1,640.
A credit to Materials Price Variance of $3,450.
A debit to Work in Process Inventory of $92,660.
A credit to Direct Materials Inventory of $92,660.
James Inc.'s flexible budget for June, based upon actual output, called for the use of 11,300 pounds of materials at a standard cost of $8.20 per pound. The Production Department actually used 11,500 pounds of materials costing $7.90 per pound during June.
James's materials price variance for June is:$3,450 unfavorable.
$3,390 favorable.
$3,450 favorable.
$3,390 unfavorable.
The materials quantity variance for James's June operations is:
$3,390 favorable.
$3,450 unfavorable.
$1,640 unfavorable.
$3,450 favorable.
The journal entry to record the cost of direct materials used in June includes each of the following except:
A debit to Materials Quantity Variance of $1,640.
A credit to Materials Price Variance of $3,450.
A debit to Work in Process Inventory of $92,660.
A credit to Direct Materials Inventory of $92,660.
Explanation / Answer
1)Price variance = AQ(AP -SP)
= 11500 (7.9 - 8.2)
= 11500 * -.3
= - 3450 (F)
correct option is "C"
3) correct option is "D" -A credit to Direct Materials Inventory of $92,660.
[Raw material inventry will credited with actual cost = 11500 *7.9 = 90850
2)Quantity variance =SR(AQ -SQ)
= 8.2 (11500-11300)
= 8.2 * 200
= 1640 (U)
Correct option is " C"
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