Which of the following journal entries correctly represents the recording of an unfavourable material price variance?
A) Direct material debit, materials price variance and accounts payable credit.
B) Direct material and materials price variance debit, accounts payable credit.
C) Direct material debit, work in process and accounts payable credit.
D) Direct materials debit, accounts payable credit.

Question

Quizplus · Accepted Answer

An unfavorable material price variance occurs when the actual cost of materials is higher than the expected cost. The correct journal entry to record this variance debits both the Direct Material (for the actual cost of materials purchased) and the Materials Price Variance account (for the unfavorable variance amount), and credits Accounts Payable (for the total amount owed to suppliers). This reflects the increased cost of materials and the unfavorable variance in one entry.

Which of the Following Journal Entries Correctly Represents the Recording