Which One of the Following Journal Entries in a Standard

question 54

Multiple Choice

Which one of the following journal entries in a standard cost system is needed at the end of the period to close out to Cost of Goods Sold an unfavorable production-volume variance?

• A) A credit to Finished Goods Inventory, at standard cost.
• B) A credit to Cost of Goods sold, at standard cost.
• C) A credit to Cost of Goods sold, at actual cost.
• D) A debit to the Production Volume Variance account.
• E) A debit to Cost of Goods sold.

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Definitions:

Work in Process Inventory

Inventory that includes all the materials, labor, and overhead costs for products that are in the process of being manufactured but are not yet complete.

Direct Labor Costs

The cost of wages paid to workers directly involved in the production of goods or services.

Raw Materials

Basic materials that are used in the production process, which will be transformed into finished goods through manufacturing.

Work in Process Inventory

Goods that are in the production process but have not yet been completed.