Mejor Medical Machines manufactures hospital equipment. The company was recently able
to purchase materials for production and secure a bulk purchase discount with an additional prompt payment cash discount. However, as the materials were transferred into production of $3,900 from DM Inventory, due to the lower quality of materials, additional calibrations were needed to achieve the original quality in the production of the equipment, and an unfavorable Direct Materials (DM) Efficiency Variance of $500 resulted. Record the journal entry to recognize this use of the direct materials into production for Mejor Medical assuming that this unfavorable variance is recognized when materials are placed into production.

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The Answer of Mejor Medical Machines manufactures hospital equipment. The company was recently able
to purchase materials for production and secure a bulk purchase discount with an additional prompt payment cash discount. However, as the materials were transferred into production of $3,900 from DM Inventory, due to the lower quality of materials, additional calibrations were needed to achieve the original quality in the production of the equipment, and an unfavorable Direct Materials (DM) Efficiency Variance of $500 resulted. Record the journal entry to recognize this use of the direct materials into production for Mejor Medical assuming that this unfavorable variance is recognized when materials are placed into production.

Mejor Medical Machines Manufactures Hospital Equipment