When the actual amount of a raw material used in production is less 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 less than the standard amount allowed for the actual output, the difference is known as the materials quantity variance. This variance is recorded in the general ledger by debiting work-in-process and crediting the materials quantity variance account. Therefore, the correct journal entry is Debit to Work-In-Process; Credit to Materials Quantity Variance.

When the Actual Amount of a Raw Material Used in Production