Answer:
Option (a) is correct.
Explanation:
Given that,
Lumber purchased = 6,000 feet
Cost per foot (actual price) = $6
Standard price for direct materials = $5
Cost of purchasing material:
= Quantity of lumber purchased × Price per foot
= 6,000 × $6
= $36,000
Direct materials price variance:
= (Standard Price - Actual Price) × Actual Quantity purchased
= ($5 - $6) × 6,000
= $6,000 Unfavorable
Therefore, the journal entry is as follows:
Direct Materials A/c Dr. $30,000
Direct Materials Price Variance A/c Dr. $6,000
To Accounts Payable 36,000
(To record the purchase and unfavorable direct materials price variance)
