During March, a small roofing company purchased 700 bundles of a certain type of shingle at a price of $35 per bundle, $8 more than the standard price. The company's standard quantity of this type of shingles is 725 bundles.
-Refer to the Figure.What is the journal entry to record the purchase of materials?
A)Materials 19,575Materials Price Variance 5,800Accounts Payable 25,375
B)Materials 24,500Materials Price Variance 5,600Accounts Payable 18,900
C)Materials 18,900Materials Price Variance 5,600Accounts Payable 24,500
D)Materials 25,375Materials Price Variance 5,800Accounts Payable 19,575

Question

Quizplus · Accepted Answer

The total cost of the shingles purchased is calculated as:

700 bundles x $35 per bundle = $24,500

Since the company paid $8 more per bundle than the standard price, the materials price variance is:

700 bundles x $8 per bundle = $5,600 unfavorable

Therefore, the journal entry to record the purchase of materials is:

Materials       24,500
Materials Price Variance    5,600
Accounts Payable             18,900

Option C is the only one that matches this journal entry.

During March, a Small Roofing Company Purchased 700 Bundles of a Certain