Which of the Following Is True Regarding the Disposition of Materials

question 167

Multiple Choice

Which of the following is true regarding the disposition of materials and labor variances?

• A) The variances for materials and labor are closed directly to Cost of Goods Sold regardless of materiality.
• B) If the materials price variance is material, it is prorated among Materials Inventory, Materials Usage Variance, Work in Process, and Finished Goods.
• C) The materials usage variance and the labor variances, if material, are prorated among Work in Process, Finished Goods, and Cost of Goods Sold.
• D) The materials usage variance and the labor variances are always prorated among Work in Process, Finished Goods, and Cost of Goods Sold.
• E) The materials usage variance and the labor variances are always closed to Cost of Goods Sold.

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Definitions:

Employer Demands

Requirements or conditions set by employers during negotiations with employees or unions regarding salaries, working conditions, and other employment terms.

Voluntaristic System

An approach to labor relations in which union membership and worker representation are matters of individual choice rather than legal requirement.

Relative Bargaining Power

The comparative power or leverage one party has over another in negotiation settings, often influenced by economic, legal, or situational factors.

Labor Law

The body of laws, administrative rulings, and precedents which address the legal rights and restrictions of working people and their organizations.