The Odle Company makes and sells a single product called a Kitt. Odle uses a standard costing system. Each Kitt has a standard cost of 5 pounds of material at $12 per pound and 0.9 direct labor-hours at $15 per hour. There were no inventories of any kind on June 1. During June, the following events occurred:

• Purchased 17,000 pounds of material at a total cost of $190,000.
• Used 15,000 pounds of material to produce 2,400 Kitts.
• Used 1,900 hours of direct labor time at a total cost of $38,000.
-To record the purchase of direct materials,the general ledger would include what kind of entry to the Materials Price Variance Account?
A)$14,000 credit
B)$14,000 debit
C)$10,000 credit
D)$10,000 debit

Question

The Odle Company makes and sells a single product called a Kitt. Odle uses a standard costing system. Each Kitt has a standard cost of 5 pounds of material at $12 per pound and 0.9 direct labor-hours at $15 per hour. There were no inventories of any kind on June 1. During June, the following events occurred:

• Purchased 17,000 pounds of material at a total cost of $190,000.
• Used 15,000 pounds of material to produce 2,400 Kitts.
• Used 1,900 hours of direct labor time at a total cost of $38,000. 
-To record the purchase of direct materials,the general ledger would include what kind of entry to the Materials Price Variance Account?
A)$14,000 credit
B)$14,000 debit
C)$10,000 credit
D)$10,000 debit

Quizplus · Accepted Answer

The Materials Price Variance Account is credited when the actual cost of materials is less than the standard cost, indicating a favorable variance.

The Odle Company Makes and Sells a Single Product Called