Robnett Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs. There is no variable manufacturing overhead. The standard cost card for the company's only product is as follows:InputsStandard Quantityor HoursStandard Price or RateStandard CostDirect materials3.8liters$6.50per liter$24.70Direct labor0.60hours$18.00per hour 10.80Fixed manufacturing overhead0.60hours$18.50per hour 11.10Total standard cost per unit $ 46.60During the year, the company completed the following transactions:a. Purchased 106,900 liters of raw material at a price of $6.80 per liter.b. Used 93,760 liters of the raw material to produce 24,700 units of
work in process.Assume that all transactions are recorded on the below worksheet, which is similar to the worksheet shown in your text except that it has been divided into two parts so that it fits on one page. The beginning balances in each of the accounts have been given. PP&E (net) stands for Property, Plant, and Equipment net of depreciation.?CashRaw MaterialsWork in ProcessFinished GoodsPP&E (net)=Materials Price VarianceMaterials Quantity Variance1/1$1,110,000$54,340$0$60,580$616,800=$0$0a.?????=??b.?????=???Labor Rate VarianceLabor Efficiency VarianceFOH Budget VarianceFOH Volume VarianceRetained Earnings1/1$0$0$0$0$1,841,720a.?????b.?????When the purchase of raw materials is recorded in transaction (a) above, which of the following entries will be made?
A. ($32,070) in the Materials Quantity Variance column
B. ($32,070) in the Materials Price Variance column
C. $32,070 in the Materials Quantity Variance column
D. $32,070 in the Materials Price Variance column
Answer: B
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