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Question Content Area A company records its inventory purchases at standard cost but also records purchase price variances. The company purchased 5,000 widgets at $8.00 each, and the standard cost for the widgets is $7.60. Which of the following would be included in the journal entry? a. debit Accounts Payable, $38,000 b. credit Direct Materials Price Variance, $2,000 c. debit Accounts Payable, $2,000 d. debit Direct Materials Price Variance, $2,000

Question Content Area A company records its inventory purchases at standard cost but also records purchase price variances. The company purchased 5,000 widgets at $8.00 each, and the standard cost for the widgets is $7.60. Which of the following would be included in the journal entry? a. debit Accounts Payable, $38,000 b. credit Direct Materials Price Variance, $2,000 c. debit Accounts Payable, $2,000 d. debit Direct Materials Price Variance, $2,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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  1. Question Content Area

    A company records its inventory purchases at standard cost but also records purchase price variances. The company purchased 5,000 widgets at $8.00 each, and the standard cost for the widgets is $7.60. Which of the following would be included in the journal entry?

    a. debit Accounts Payable, $38,000
    b. credit Direct Materials Price Variance, $2,000
    c. debit Accounts Payable, $2,000
    d. debit Direct Materials Price Variance, $2,000
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