Which Statement Is True Concerning Unfavorable Variances in a Standard

question 113

Multiple Choice

Which statement is true concerning unfavorable variances in a standard costing system?

• A) They are recorded only if they are significant.
• B) They are offset by favorable variances for the same amounts.
• C) They are recorded in the cost of goods sold account when incurred.
• D) They are recorded with debits.

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Definitions:

Basic Necessities

Goods or services considered essential for maintaining a minimum standard of living, such as food, water, shelter, and healthcare.

Utilitarian Justice

A principle that advocates for actions that promote the greatest happiness or utility for the greatest number of people.

Decreasing Marginal Utility

The economic principle stating that as a person increases consumption of a product, there is a decline in the marginal utility that person derives from consuming each additional unit of that product.

Redistribution

The process of reallocating income, wealth or resources from certain groups within society to others, often through taxation and welfare systems.