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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 Preview

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

    Solution Summary

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