Atlace Manufacturing uses a standard cost system

Standards for direct materials are as follows:

Direct materials (pounds per unit of output) 3
Cost per pound of direct materials $4

The company plans to produce 3,000 units and has purchased 12,000 pounds of direct materials at a net cost of $43,200. What is the journal entry to record this transaction?

A)
Raw Materials Inventory (12,000 pounds x $4/pound) 48,000
Direct Materials Cost Variance 4,800
Accounts Payable (12,000 pounds x $3.60/pound) 43,200

B)
Raw Materials Inventory (12,000 pounds x $4/pound) 48,000
Direct Materials Cost Variance 4,800
Accounts Payable (12,000 pounds x $3.60/pound) 43,200

C)
Raw Materials Inventory (12,000 pounds x $3.60/pound) 43,200
Direct Materials Cost Variance 4,800
Accounts Payable (12,000 pounds x $4/pound) 48,000

D)
Raw Materials Inventory (12,000 pounds x $3.60/pound) 43,200
Direct Materials Cost Variance 4,800
Accounts Payable (12,000 pounds x $4/pound) 48,000

A