Colbeck Corporation uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. The standard cost card for the company's only product is as follows: During the year, the company purchased 68,000 gallons of raw material at a price of $5.40 per gallon and used 62,660 gallons of the raw material to produce 18,400 units of work in process.Assume that all transactions are recorded on a worksheet as shown in the text. On the left-hand side of the equals sign in the worksheet are columns for Cash, Raw Materials, Work in Process, Finished Goods, and Property, Plant, and Equipment (net). All of the variance columns are on the right-hand-side of the equals sign along with the column for Retained Earnings.When recording the raw materials used in production, the Raw Materials inventory account will increase (decrease) by:
A) ($375,960)
B) $375,960
C) ($338,364)
D) $338,364

Question

Colbeck Corporation uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. The standard cost card for the company's only product is as follows:  During the year, the company purchased 68,000 gallons of raw material at a price of $5.40 per gallon and used 62,660 gallons of the raw material to produce 18,400 units of work in process.Assume that all transactions are recorded on a worksheet as shown in the text. On the left-hand side of the equals sign in the worksheet are columns for Cash, Raw Materials, Work in Process, Finished Goods, and Property, Plant, and Equipment (net). All of the variance columns are on the right-hand-side of the equals sign along with the column for Retained Earnings.When recording the raw materials used in production, the Raw Materials inventory account will increase (decrease) by:
A) ($375,960) 
B) $375,960 
C) ($338,364) 
D) $338,364

Quizplus · Accepted Answer

The Answer of Colbeck Corporation uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. The standard cost card for the company's only product is as follows:  During the year, the company purchased 68,000 gallons of raw material at a price of $5.40 per gallon and used 62,660 gallons of the raw material to produce 18,400 units of work in process.Assume that all transactions are recorded on a worksheet as shown in the text. On the left-hand side of the equals sign in the worksheet are columns for Cash, Raw Materials, Work in Process, Finished Goods, and Property, Plant, and Equipment (net). All of the variance columns are on the right-hand-side of the equals sign along with the column for Retained Earnings.When recording the raw materials used in production, the Raw Materials inventory account will increase (decrease) by:
A) ($375,960) 
B) $375,960 
C) ($338,364) 
D) $338,364

Colbeck Corporation Uses a Standard Cost System in Which Inventories