During September,a small roofing company purchased 500 bundles of a certain type of shingle at a price of $35 per bundle,$5 less than the standard price.The company's standard quantity of this type of shingles is 550 bundles.What is the journal entry to record the purchase of materials?

Question

Quizplus · Accepted Answer

The correct answer is A because the company purchased 500 bundles of shingles at a price of $35 per bundle, which is $5 less than the standard price of $40 per bundle. The total cost of the purchase is $20,000 (500 bundles x $35 per bundle). The materials price variance is $2,500 (500 bundles x $5 per bundle). The accounts payable is $17,500 (total cost of purchase - materials price variance).

During September,a Small Roofing Company Purchased 500 Bundles of a Certain