Asked by Andrew Grasso on Jul 11, 2024
Verified
If a company records inventory purchases at standard cost and also records purchase price variances, prepare the journal entry for a purchase of widgets that were bought at $7.45 per unit and have a standard cost of $7.15. The total amount owed to the vendor for this purchase is $33,525.
Purchase Price Variances
The difference between the actual cost of goods purchased and the standard cost, used to measure the efficiency of the purchasing function.
Standard Cost
A predetermined cost of manufacturing, selling, or any other business operation, used for budgeting and performance evaluation.
- Develop the ability to prepare basic journal entries for variances and standard cost transactions.
Verified Answer
PN
Putri novaliza NovalizaJul 13, 2024
Final Answer :
Materials (4,500×$7.15)32,175 Direct Materials Price Variance 1,350 Accounts Payable (4,500×$7.45)33,525\begin{array} { | c | r | r | } \hline \text { Materials } ( 4,500 \times \$ 7.15 ) & 32,175 & \\\hline \text { Direct Materials Price Variance } & 1,350 & \\\hline \text { Accounts Payable } ( 4,500 \times \$ 7.45 ) & & 33,525 \\\hline\end{array} Materials (4,500×$7.15) Direct Materials Price Variance Accounts Payable (4,500×$7.45)32,1751,35033,525
Learning Objectives
- Develop the ability to prepare basic journal entries for variances and standard cost transactions.
Related questions
Rosser Company Produces a Container That Requires 4 Yards of ...
The Following Information Comes from the Records of Magno Co ...
The Following Information Comes from the Records of Barney Co ...
Total Overhead Variance. (B) Prepare the Journal Entries to Record ...
The Entry to Record the Payment of Office Salaries Would ...