Which of the Following Statements Is(are)true? (A)If Variances Are Prorated

question 32

Multiple Choice

Which of the following statements is(are) true? (A) If variances are prorated at the end of the accounting period,an unfavorable direct materials price variance will,when prorated,increase the value of the Finished Goods Inventory.
(B) Insignificant variances are not generally prorated at the end of the accounting period and are closed to the Cost of Goods Sold.

• A) Only A is true.
• B) Only B is true.
• C) Both A and B are true.
• D) Neither A nor B is true.