Robnett Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs. There is no variable manufacturing overhead. The standard cost card for the companys only product is as follows:

Inputs	Standard Quantity or Hours	Standard Price or Rate	Standard Cost
Direct materials	3.8 liters	$ 6.50 per liter	$ 24.70
Direct labor	0.60 hours	$ 18.00 per hour	10.80
Fixed manufacturing overhead	0.60 hours	$ 18.50 per hour	11.10
Total standard cost per unit	$ 46.60

During the year, the company completed the following transactions:

a. Purchased 106,900 liters of raw material at a price of $6.80 per liter.

b. Used 93,760 liters of the raw material to produce 24,700 units of work in process.

Assume that all transactions are recorded on the below worksheet, which is similar to the worksheet shown in your text except that it has been divided into two parts so that it fits on one page. The beginning balances in each of the accounts have been given. PP&E (net) stands for Property, Plant, and Equipment net of depreciation.

	Cash	Raw Materials	Work in Process	Finished Goods	PP&E (net)	=	Materials Price Variance	Materials Quantity Variance	Labor Rate Variance	Labor Efficiency Variance	FOH Budget Variance	FOH Volume Variance	Retained Earnings
1/1	$1,110,000	$54,340	$0	$60,580	$616,800	=	$0	$0	$0	$0	$0	$0	$1,841,720
a.						=
b.						=

When the raw materials used in production are recorded in transaction (b) above, which of the following entries will be made?

Multiple Choice

A. ($650) in the Materials Price Variance column

B. $650 in the Materials Price Variance column

C. ($650) in the Materials Quantity Variance column

D. $650 in the Materials Quantity Variance column