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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

If variances are recorded in the accounts at the time the manufacturing costs are incurred, what does a debit balance in Direct Materials Price Variance represent?

To determine

Direct materials price variances:

The difference between the actual price and the standard price multiplied by the actual quantity is known as direct materials price variance. When the actual price exceeds the standard price, the variance is unfavorable. Similarly, when the actual price is less than the standard price, the variance is favorable.

To identify: The representation of the debit balance in direct materials price variance, if the variances are recorded in the accounts at the time the manufacturing costs are incurred.

Explanation

When there is a debit balance in direct materials price variance, if the variances are recorded in the acco...

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