Asked by Stephanie Springstroh on May 14, 2024
Verified
A company records its inventory purchases at standard cost but also records purchase price variances. The company purchased 5,000 widgets at $8.00 each, and the standard cost for the widgets is $7.60. Which of the following would be included in the journal entry? 
Purchase Price Variances
Differences between the actual cost of materials purchased and the expected (budgeted) cost, often analyzed in cost accounting.
Standard Cost
A predetermined cost of manufacturing a product or providing a service, used as a benchmark to measure actual performance and efficiencies.
Widgets
Widgets are a generic term for small devices or gadgets, or can refer to hypothetical products used in economics or financial examples.
- Digest the techniques for calculating differences in direct materials, direct labor, and manufacturing overhead costs.
- Understand the methodology for modifying journal entries upon identifying substantial discrepancies.
Verified Answer
MK
Learning Objectives
- Digest the techniques for calculating differences in direct materials, direct labor, and manufacturing overhead costs.
- Understand the methodology for modifying journal entries upon identifying substantial discrepancies.