Assume that SQ = Standard Quantity,SP = Standard Price,AQ = Actual Quantity,and AP = Actual Price.Also assume a favourable materials usage variance.Which of the following would be the journal entry and the equation to record the issuance and usage of materials?
A)Work in Process SQ × SPMaterials Usage Variance (AQ − SQ)SPMaterials AQ × SP
B)Work in Process AQ × SPMaterials Usage Variance (AQ − SQ)SPMaterials AQ × SP
C)Work in Process AQ × APMaterials Usage Variance (AQ − SQ)SPMaterials AQ × SP
D)Work in Process SQ × APMaterials Usage Variance (AQ − SQ)SPMaterials AQ × SP

Question

Quizplus · Accepted Answer

The correct journal entry for a favorable materials usage variance is to debit Work in Process for the standard quantity at the standard price (SQ × SP), credit Materials for the actual quantity at the standard price (AQ × SP), and record the Materials Usage Variance as a credit for the difference (AQ − SQ) × SP.

Assume That SQ = Standard Quantity,SP = Standard Price,AQ =