Question

TLA Inc. makes a unit called EV. EV has a standard of 3 yards of fabric for each EV. There is no beginning inventory of fabric. The standard price per yard of fabric is $2. During the period, TLA made 8,000 EVs. TLA purchased and used 16,800 yards of fabric and incurred an actual cost of $48,500 for the fabric. If TLA uses a standard cost system the journal entry to record the materials purchase should include a ______ to Materials Control in the amount of ______.

Answer 1

Units purchased			16800
Std price per yard			2
Std cost of material purchased			33600
Actual cost of material purchased			48500
Journal entry for material purchase at Standard costing:
Material control Dr.				33600
Material price variance Dr. (48500-33600)				14900
Accounts payable					48500
Material purchase should include a DEBIT to Material control in the amount of $ 33600