Microsoft Dynamics 365 Supply Chain Management, Manufacturing — Question 28

You have updated a cost category price from $5.00 to $7.00. You process a production order which uses the cost category.
After ending the order, you realize a new standard cost was not calculated after the price update.
You need to validate how this impacted the financial voucher transactions.
Which transaction would you see in the general ledger?

Answer options

• A. $2.00 debit to the production price variance account
• B. $2.00 credit to the production price variance account
• C. $2.00 debit to the production quantity variance account
• D. $2.00 credit to the lot size variance account

Correct answer: B

Explanation

The correct answer is B because the increase in cost leads to a credit in the production price variance account, reflecting that the actual cost exceeded the standard cost. Options A, C, and D are incorrect as they do not accurately represent the impact of the price change on the production price variance account.