Landlubber Company Has Established a Standard Direct Material Cost of 1.5

Multiple Choice

Landlubber Company has established a standard direct material cost of 1.5 gallons @ $2 per gallon for one unit of its product.During the past month,actual production of this product was 6,500 units.The direct materials usage (efficiency) variance was $700 (favorable) and the materials price variance (calculated at point of production) was $470 (unfavorable) .The entry to charge Work in Process Inventory for the standard material costs during the month and to record the direct material variances in the accounts would include all the following except:

A) A debit to Work in Process Inventory for $19,500.
B) A debit to Direct Materials Inventory for $18,800.
C) A debit to Direct Materials Price Variance for $470.
D) A credit to Direct Material Usage Variance for $700.
E) A credit to Work in Process Inventory for $18,800.