When a Manufacturing Company Uses Standard Costing System, an Unfavorable

question 2

True/False

When a manufacturing company uses standard costing system, an unfavorable variance has the effect of being a contra expense.

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Definitions:

FIFO

First In, First Out, an inventory valuation method where the cost of the earliest items purchased are the first to be recognized in determining the cost of goods sold.

Taxation Authority

Refers to the governmental agency responsible for administering and collecting taxes.

Import Duties

Taxes imposed by a country on goods brought into its territory from foreign countries to protect domestic industries from foreign competition.

Retrospectively

Looking back at past events or situations, often to reevaluate or analyze them with current knowledge.