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Journal entry for variance

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If a company records their inventory purchases at standard cost but also records purchase price
variances, what journal entry would be recorded if a purchase of 5,000 widgets were bought at
$8.00 having a standard cost of $8.15?
Dr Cr
_________________ $ ________
_________________ $ ________
_________________ $ ________

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Solution Summary

The solution explains the journal entry to be made for purchase variance when standard costs are used.

Solution Preview

Under standard costing, inventory would be recorded at standard cost = 5,000X8.15 = ...

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