Question

Dvorak Company produced 3,500 units that require 5 standard pounds per unit at $6 standard price per pound. The company actually used 17,000 pounds in production.

Journalize the entry to record the standard direct materials used in production. For a compound transaction, if an amount box does not require an entry, leave it blank.

	Work in Process
	Direct Materials Quantity Variance
	Materials

Answer 1

Direct material quantity variance = (Standard quantuty-Actual quantity)*Standard price

= ((3500*5) - 17000) *$6

= (17500-17000)*$6

= $3000

Work in progress will be debited with the standard cost of material i.e. 3500*5*$6 = l$105000

Materials awould be credited with the standard cost of actual material used i.e. 17000*$6 = $102000

The difference of $3000 would be credited to direct material quantity variance

The journal entry would be:

Work in progress Dr $105000

Direct material quantity variance $3000

Materials $102000