When the actual amount of a raw material used in production is greater than the standard amount allowed for the actual output,the journal entry would include:
A) debit to Raw Materials;credit to Materials Quantity Variance.
B) debit to Work-In-Process;credit to Materials Quantity Variance.
C) debit to Raw Materials;debit to Materials Quantity Variance.
D) debit to Work-In-Process;debit to Materials Quantity Variance.

Question

Quizplus · Accepted Answer

When the actual amount of a raw material used in production is greater than the standard amount allowed for the actual output, it results in a negative Materials Quantity Variance. According to the principles of cost accounting, the variance is recorded with a debit to Work-In-Process to increase the costs associated with the output and a debit to the Materials Quantity Variance account to reflect the unfavorable variance. Therefore, the correct journal entry would be a debit to Work-In-Process and a debit to Materials Quantity Variance. Option D is the only one that meets these criteria.

When the Actual Amount of a Raw Material Used in Production