Some Accountants Would Argue That Any Variances from Standard Costs,when

question 134

Multiple Choice

Some accountants would argue that any variances from standard costs,when such standards are current,should be written off to cost of goods sold.The principal rationale for this treatment is:

• A)This is the treatment required currently under generally accepted accounting principles.
• B)To allocate such variances implies that asset values on the balance sheet (i.e. ,inventories)contain the cost of inefficiencies.
• C)The negligible effect this treatment has on total cost of goods sold for the period.
• D)Consistency with current income tax provisions.

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Definitions:

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