Reference no: EM132949153

Question - During the month of August, Linosa Manufacturing Corporation purchased 10,000 pounds of materials at a total actual cost of P70,000. Linosa used 8,000 pounds of this material for August's production. Linosa's materials price variance for August was P4,000 favorable. Its materials quantity variance was P7,000 unfavorable. What journal entry would Linosa make to record the usage of materials and the materials quantity variance for the month of August?

Debit Work in Process 67,000, Debit Materials Quantity variance 7,000 and Credit Raw Materials 74,000

Debit Work in Process 52,200, Debit Materials Quantity variance 7,000 and Credit Raw Materials 59,200

Debit Raw materials 63,000, Debit Materials Quantity variance 7,000 and Credit Accounts Payable 70,000

Debit Work in Process 66,200, Credit Materials Quantity variance 7,000 and Credit Raw Materials 59,200