When the actual price to purchase a raw material on account exceeds its standard price, the journal entry would include:
A)Debit to Raw Materials; Credit to Materials Price Variance
B)Debit to Accounts Payable; Credit to Materials Price Variance
C)Debit to Raw Materials; Debit to Materials Price Variance
D)Debit to Accounts Payable; Debit to Materials Price Variance

Question

Quizplus · Accepted Answer

When the actual price exceeds the standard price, the variance is unfavorable, requiring a debit to the Materials Price Variance account.

When the Actual Price to Purchase a Raw Material on Account