Which Statement Is True Concerning a Standard Costing System

question 121

Multiple Choice

Which statement is true concerning a standard costing system?

• A) Unfavorable variances are recorded; favorable variances are not recorded in the accounting records.
• B) Only unfavorable variances that are large enough to be investigated under the company's management by exception policy are recorded in the accounting records.
• C) The costs added to the inventory accounts are recorded at standard costs rather than actual costs.
• D) No Work in Process Inventory account is used.

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Definitions:

Quantity Supplied

The quantity of a product or service that suppliers are ready and capable of selling at a particular price during a certain timeframe.

Demand Curve

A visual depiction that illustrates the connection between a product's price and the amount consumers are willing to buy at different prices.

Equilibrium Price

The rate at which the supply of goods equals the demand for goods.

Quantity Demanded

The total amount of a good or service that consumers are willing to purchase at a given price.