Rees Manufacturing uses a standard cost system. Standards for direct materials are as? follows:

Direct materials? (pounds per unit of? output)	3
Cost per pound of direct materials	?$6

Actual purchases of direct materials for the current month are? 10,000 pounds for? $48,600. Planned and actual production for the month is? 3,100 units. Rees has issued? 10,000 pounds of direct materials to production. The journal entry to record this transaction is? ________.

A.

a debit to? Work-in-Process Inventory for? $55,800, a credit to Raw Materials Inventory for? $60,000, and a debit to Direct Materials Efficiency Variance for? $4,200

B.

a debit to? Work-in-Process Inventory for? $45,198, a credit to Raw Materials Inventory for? $55,800, and a debit to Direct Materials Efficiency Variance for? $10,602

C.

a debit to? Work-in-Process Inventory for? $45,198, a credit to Raw Materials Inventory for? $60,000, and a debit to Direct Materials Efficiency Variance for? $14,802

D.

a debit to? Work-in-Process Inventory for? $60,000, a credit to Raw Materials Inventory for? $48,600, and a credit to Direct Materials Efficiency Variance for? $60,000

Home Industries is considering replacing a machine that is presently used in its production process. Which of the following amounts represents a sunk? cost?

	Old Machine	Replacement Machine
Original cost	?????? $55,000	?????? $45,000
Remaining useful life in years	5	5
Current age in years	5	0
Book value	???? $33,000
Current disposal value in cash	? $9,000
Future disposal value in cash? (in 5? years)	?$0	?$0
Annual cash operating costs	??? $8,000	? $4,000

A.

?$55,000

B.

?$45,000

C.

?$33,000

D.

?$9,000