Question: Rees Manufacturing uses a standard cost system. Standards for direct materials are as follows: Actual purchases of direct materials for the current month are 10,000

Rees Manufacturing uses a standard cost system. Standards for direct materials are as follows:

Actual purchases of direct materials for the current month are 10,000 pounds for $51,600. Planned and actual production for the month is 3,000 units. Rees has issued 10,000 pounds of direct materials to production. The journal entry to record this transaction is ________.

A) a debit to Work-in-Process Inventory for $30,960, a credit to Raw Materials Inventory for $36,000, and a debit to Direct Materials Efficiency Variance for $5,040

B) a debit to Direct Materials Efficiency Variance for $29,040

C) a debit to Work-in-Process Inventory for $36,000, a credit to Raw Materials Inventory for $60,000, and a debit to Direct Materials Efficiency Variance for $24,000

D) a debit to Work-in-Process Inventory for $60,000, a credit to Raw Materials Inventory for $51,600, and a credit to Direct Materials Efficiency Variance for $60,000

FYI - The answer is (C) - a debit to Work-in-Process Inventory for $36,000, a credit to Raw Materials for $60,000, and a debit to Direct Materials Efficiency Variance for $24,000. Can someone explain?

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