using the solution to note 10 30 quot review problem 10 3 quot prepare a journal ent 1571513

Using the solution to Note 10.30 “Review Problem 10.3”, prepare a journal entry to record the purchase of raw materials.

Review Problem 10.3

Carol’s Cookies expected to use 1.5 pounds of direct materials to produce 1 unit (batch) of product at a cost of $2 per pound. Actual results are in for last year, which indicates 390,000 batches of cookies were sold. The company purchased 640,000 pounds of materials at $1.80 per pound and used 624,000 pounds in production.

1. Calculate the materials price and quantity variances using the format shown in .

2. Use the alternative approach to calculating the materials price and quantity variances, and compare the result to the result in part 1. (Hint: the variances should match.)

3. Suggest several possible reasons for the materials price and quantity variances.