When the actual amount of a raw material used in production is greater than the standard amount allowed for the actual output,the journal entry would include:
A)Debit to Raw Materials;Credit to Materials Quantity Variance
B)Debit to Work-In-Process;Credit to Materials Quantity Variance
C)Debit to Raw Materials;Debit to Materials Quantity Variance
D)Debit to Work-In-Process;Debit to Materials Quantity Variance

Question

Quizplus · Accepted Answer

When the actual amount of a raw material used in production is greater than the standard amount allowed for the actual output, it is considered an unfavorable variance and is recorded as a debit to Work-In-Process (as this is where the raw materials are being used in production) and a debit to Materials Quantity Variance (which is a contra account to Raw Materials). Therefore, the correct answer is D, which includes both the debit to Work-In-Process and the debit to Materials Quantity Variance. Options A and C include a credit to Materials Quantity Variance, which is incorrect as it needs to be debited for an unfavorable variance. Option B only includes a debit to Work-In-Process, which is incorrect as the variance needs to be recorded as well.

When the Actual Amount of a Raw Material Used in Production