Rees Manufacturing uses a standard cost system
Standards for direct materials are as follows:
Direct materials (pounds per unit of output) 3
Cost per pound of direct materials $6
Actual purchases of direct materials for the current month are 10,000 pounds for $48,600. Planned and actual production for the month is 3,100 units. Rees has issued 10,000 pounds of direct materials to production. The journal entry to record this transaction is ________.
A) a debit to Work-in-Process Inventory for $45,198, a credit to Raw Materials Inventory for $55,800, and a debit to Direct Materials Efficiency Variance for $10,602
B) a debit to Work-in-Process Inventory for $45,198, a credit to Raw Materials Inventory for $60,000, and a debit to Direct Materials Efficiency Variance for $14,802
C) a debit to Work-in-Process Inventory for $55,800, a credit to Raw Materials Inventory for $60,000, and a debit to Direct Materials Efficiency Variance for $4,200
D) a debit to Work-in-Process Inventory for $60,000, a credit to Raw Materials Inventory for $48,600, and a credit to Direct Materials Efficiency Variance for $60,000
C .C)
Planned production units 3,100
Standard cost per pound $6
Pounds of direct materials per unit 3
Standard cost or WIP(3 x $6 x 3,100 ) $55,800
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