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The Dexon Company makes and sells a single product, called a Mip, and employs a standard costing system. The following standards have been established for one unit of Mip: Standard Quantity or Hours 6 board metre 0.8 hours Standard Cost per Mip $9.00 $9.60 Direct Materials Direct Labour There were no inventories of any kind on August 1. During August, the following events occurred: Purchased 15,000 board metres at the total cost of $24,000. Used 12,000 board metres to produce 2,100 Mips. Used 1,700 hours of direct labour time at a total cost of $20,060. 6. To record the purchase of direct materials, the general ledger would include what entry to the Materials Price Variance account? A) $1,500 credit. B) $1,500 debit. C) $6,000 credit. D) $6,000 debit.

The Dexon Company makes and sells a single product, called a Mip, and employs a standard costing system. The following standards have been established for one unit of Mip: Standard Quantity or Hours 6 board metre 0.8 hours Standard Cost per Mip $9.00 $9.60 Direct Materials Direct Labour There were no inventories of any kind on August 1. During August, the following events occurred: Purchased 15,000 board metres at the total cost of $24,000. Used 12,000 board metres to produce 2,100 Mips. Used 1,700 hours of direct labour time at a total cost of $20,060. 6. To record the purchase of direct materials, the general ledger would include what entry to the Materials Price Variance account? A) $1,500 credit. B) $1,500 debit. C) $6,000 credit. D) $6,000 debit.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 28P: Haversham Corporation produces dress shirts. The company uses a standard costing system and has set...
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The Dexon Company makes and sells a single product, called a Mip, and employs a standard costing system. The following standards have been established for one unit of Mip: Standard Quantity or Hours 6 board metre 0.8 hours Standard Cost per Mip $9.00 $9.60 Direct Materials Direct Labour There were no inventories of any kind on August 1. During August, the following events occurred: Purchased 15,000 board metres at the total cost of $24,000. Used 12,000 board metres to produce 2,100 Mips. Used 1,700 hours of direct labour time at a total cost of $20,060. 6. To record the purchase of direct materials, the general ledger would include what entry to the Materials Price Variance account? $1,500 credit. A) $1,500 debit. B) $6,000 credit. $6,000 debit.
Transcribed Image Text:The Dexon Company makes and sells a single product, called a Mip, and employs a standard costing system. The following standards have been established for one unit of Mip: Standard Quantity or Hours 6 board metre 0.8 hours Standard Cost per Mip $9.00 $9.60 Direct Materials Direct Labour There were no inventories of any kind on August 1. During August, the following events occurred: Purchased 15,000 board metres at the total cost of $24,000. Used 12,000 board metres to produce 2,100 Mips. Used 1,700 hours of direct labour time at a total cost of $20,060. 6. To record the purchase of direct materials, the general ledger would include what entry to the Materials Price Variance account? $1,500 credit. A) $1,500 debit. B) $6,000 credit. $6,000 debit.
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