When Standard Costs Are Used in a Cost Accounting System

question 81

Multiple Choice

When standard costs are used in a cost accounting system, the transfer of units from the Finished Goods Inventory to the Cost of Goods Sold account involves:

• A) A debit to the Cost of Goods Sold account for the actual cost of units transferred.
• B) A credit to the Finished Goods Inventory account for the standard cost of units transferred.
• C) Recording a cost variance for the difference between the actual and standard cost of units transferred.
• D) The elimination of any cost variances relating to units sold.

---

Definitions:

Pneumothorax

The medical condition where air leaks into the space between the lung and chest wall, causing the lung to collapse.

Atelectasis

A condition characterized by the partial or complete collapse of a lung or a section (lobe) of a lung.

Pulmonary Edema

A condition characterized by an accumulation of fluid in the lungs' air sacs, leading to difficulty breathing.

Bronchial Tree

The system of airways in the lungs that allows for the passage of air from the trachea down to the smaller bronchioles and alveoli for gas exchange.