Assuming that the Morocco Desk Co. purchases 6,000 feet of lumber at $6.00 per f
ID: 2581844 • Letter: A
Question
Assuming that the Morocco Desk Co. purchases 6,000 feet of lumber at $6.00 per foot and the standard price for direct materials is $5.00, the entry to record the purchase and unfavorable direct materials price variance is:
Select one:
a. Direct Materials 30,000
Direct Materials Price Variance 6,000
Accounts Payable 36,000
b. Direct Materials 30,000
Accounts Payable 30,000
c. Direct Materials 36,000
Direct Materials Price Variance 6,000
Accounts Payable 30,000
d. Work in Process 36,000
Direct Materials Price Variance 6,000
Accounts Payable 30,000
Explanation / Answer
a. Direct Materials 30,000 Direct Materials Price Variance 6,000 Accounts Payable 36,000 Standard Actual Particulars Qty Rate amount Quantity Rate amount Materials 5.00 - 6,000.00 6.00 36,000.00 DMPV = (SP-AP)*AQ purchased DMPV = (5 - 6)6000 DMPV = 6000 U