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.

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