Where are variances ultimately charged in a standard costing system? Multiple Choice Cost of Goods Sold Manufacturing Overhead Finished Goods Since actual costs are charged to each job, no variances are recorded

Where are variances ultimately charged in a standard costing system? Multiple Choice Cost of Goods Sold Manufacturing Overhead Finished Goods Since actual costs are charged to each job, no variances are recorded

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Description: Where are variances ultimately charged in a standard costing system? Multiple Choice Cost of Goods Sold Manufacturing Overhead Finished Goods Since actual costs are charged to each job, no variances are recorded.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

Topic Video

Question

Where are variances ultimately charged in a standard costing system?

Multiple Choice

Cost of Goods Sold
Manufacturing Overhead
Finished Goods
Since actual costs are charged to each job, no variances are recorded.

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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