When material price variances are recognised at the time of material purchase, direct materials used are
A) credited to the materials account at standard cost.
B) debited to the work in process account at actual prices.
C) credited to the materials account at actual cost.
D) debited to the materials account at standard cost.

Question

Quizplus · Accepted Answer

When material price variances are recognized at the time of material purchase, the materials account is credited at standard cost. This approach aligns the cost of materials used in production with the standard cost, while any variance from the actual cost is recognized immediately upon purchase.

When Material Price Variances Are Recognised at the Time of Material