When Variances Are Immaterial, Which of the Following Statements Is

question 62

Multiple Choice

When variances are immaterial, which of the following statements is true of the journal entry to write-off the variable overhead variance accounts?

• A) Cost of Goods Sold account will always be debited.
• B) Unfavorable efficiency variance will be credited.
• C) Favorable efficiency variance will be credited.
• D) Cost of Goods Sold account will always be credited.

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Definitions:

Allowed Charge

The amount that is the most the payer will pay any provider for each procedure or service.

Copayment

A fixed amount that a healthcare beneficiary pays for covered medical services, usually at the time of receiving the service.

Capitated Payment

A payment arrangement in healthcare where a provider is paid a set amount for each enrolled person assigned to them, regardless of the number of services provided.

Medical Provider

An individual or institution that offers healthcare services to patients.