Yohan Company has the following balances in its direct materials and direct labor variance accounts at year-end: Debit Credit Direct Materials Price Variance $1,000 Direct Materials Quantity Variance $2,000 Direct Labor Rate Variance $500 Direct Labor Efficiency Variance $3,000 Unadjusted Cost of Goods Sold equals $200,000. Which of the following would be FALSE when the year-end closing entry is made? Adjusted Cost of Goods Sold will be $198,500. O The Cost of Goods Sold account will be debited. O The Direct Labor Rate Variance account will be debited. O The Direct Materials Price Variance account will be credited.
Yohan Company has the following balances in its direct materials and direct labor variance accounts at year-end: Debit Credit Direct Materials Price Variance $1,000 Direct Materials Quantity Variance $2,000 Direct Labor Rate Variance $500 Direct Labor Efficiency Variance $3,000 Unadjusted Cost of Goods Sold equals $200,000. Which of the following would be FALSE when the year-end closing entry is made? Adjusted Cost of Goods Sold will be $198,500. O The Cost of Goods Sold account will be debited. O The Direct Labor Rate Variance account will be debited. O The Direct Materials Price Variance account will be credited.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Yohan Company has the following balances in its direct materials and direct labor variance
accounts at year-end:
Debit
Credit
Direct Materials Price Variance
$1,000
Direct Materials Quantity Variance
$2,000
Direct Labor Rate Variance
$500
Direct Labor Efficiency Variance
$3,000
Unadjusted Cost of Goods Sold equals $200,000. Which of the following would be FALSE when
the year-end closing entry is made?
Adjusted Cost of Goods Sold will be $198,500.
O The Cost of Goods Sold account will be debited.
The Direct Labor Rate Variance account will be debited.
O The Direct Materials Price Variance account will be credited.
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