Cybernet ?Systems\'s static budget predicted production of and sales of 95 conne
ID: 2403043 • Letter: C
Question
Cybernet ?Systems's static budget predicted production of and sales of 95 connectors in? August, but the company actually produced and sold only 50 connectors. Direct materials were budgeted at $91 per connector. The company purchased and used direct materials that cost $6,446.
What is the journal entry for the direct materials? purchased?
A.
Date
Accounts and Explanation
Debit
Credit
Work-in-Process Inventory
4,550
Direct Materials Cost Variance
1,896
Raw Materials Inventory
6,446
B.
Date
Accounts and Explanation
Debit
Credit
Raw Materials Inventory
4,550
Direct Materials Efficiency Variance
1,896
Accounts Payable
6,446
C.
Date
Accounts and Explanation
Debit
Credit
Raw Materials Inventory
4,550
Direct Materials Cost Variance
1,896
Accounts Payable
6,446
D.
Date
Accounts and Explanation
Debit
Credit
Work-in-Process Inventory
4,550
Direct Materials Efficiency Variance
1,896
Raw Materials Inventory
6,446
Date
Accounts and Explanation
Debit
Credit
Work-in-Process Inventory
4,550
Direct Materials Cost Variance
1,896
Raw Materials Inventory
6,446
Explanation / Answer
Option C is the answer
Raw material inventory - debited (asset) . Cost variance = 6446 - (50x91) = 1896 debited. Accounts payable of 6446 must be credited - current liabily increase
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