1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 17 – 19.

Test Company uses a standard costing system. The company developed the following standard cost sheet for one of its products.

Direct materials	(5 lbs. @ $6 per lb.)	$30
Direct labor	(2.0 hours @ $12 per hour)	24

During the year, Test Company recorded the following actual results.

Units produced	12,000
Direct materials purchased	61,000 lbs.
Direct materials used	62,000 lbs.
Direct materials cost	$5.75 per lb.
Direct labor hours	22,000
Direct labor rate	$12.50 per hour

2. The journal entry to record the issue of direct materials to production would include

	a	A credit to raw materials inventory for $360,000
	b	A credit to direct materials usage variance for $12,000
	c	A debit to direct materials usage variance for $12,000
d		A credit to raw materials inventory for $366,000

QUESTION 19

1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 17 – 19.

Test Company uses a standard costing system. The company developed the following standard cost sheet for one of its products.

Direct materials	(5 lbs. @ $6 per lb.)	$30
Direct labor	(2.0 hours @ $12 per hour)	24

During the year, Test Company recorded the following actual results.

Units produced	12,000
Direct materials purchased	61,000 lbs.
Direct materials used	62,000 lbs.
Direct materials cost	$5.75 per lb.
Direct labor hours	22,000
Direct labor rate	$12.50 per hour

2. The journal entry to record direct labor cost would include

	a	A credit to direct labor efficiency variance for $24,000
	b	A credit to wages payable for $264,000
	c	A credit to work-in-process inventory for $288,000
d		A credit to direct labor rate variance for $11,000

Answer rating: 100% (QA)

Answer is cA debit to direct materials usage variance for 12000 The material usage variance i... View the full answer