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Managerial Accounting

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Creating Standard Costs for Sub-Assemblies

MGRACT-1GZNCS

Springer, Inc. purchases raw materials for manufacturing subassemblies for \$17,250 when the standard cost is \$18,000. What entry should be recorded for the price variance and is it favorable or unfavorable?

A

Credit Materials Price Variance, Unfavorable

B

Debit Materials Price Variance, Favorable

C

Credit Materials Price Variance, Favorable

D

Debit Materials Price Variance, Unfavorable