A company operates an integrated standard cost accounting system. The standard price of raw material A is $20 per litre. At the start of period 1, the inventory of 500 litres of raw material A was valued at $20 per litre. During period 1, 100 litres of raw material A were purchased at an actual price of $21 per litre. During period 2, 550 litres of raw material A were issued to Job 789.
In respect of the above events, which TWO of the following statements are correct? (Choose two.)
A . The raw material inventory at the end of period 1 should include 100 litres valued at $21 per litre.
B . An adverse material price variance should be recorded in the statement of profit or loss for period 1.
C . The raw material inventory at the end of period 2 should be valued at $20 per litre.
D . An adverse material price variance should be recorded in the statement of profit or loss for period 2.
E . The first 500 litres of raw material A issued should be debited to the Job 789 account at $20 per litre, and the remaining 50 litres at $21 per litre.
Answer: D,E
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