A Large Favorable Variance from Standard Costs at the End

question 96

Multiple Choice

A large favorable variance from standard costs at the end of the year should be:

• A)Carried forward to the next fiscal year.
• B)Shown as other income in the income statement.
• C)Added to cost of goods sold in the income statement.
• D)Allocated between ending inventories and cost of goods sold.

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Definitions:

Total Utility

The total satisfaction received from consuming a particular quantity of a good or service.

Day

A unit of time equal to 24 hours, representing one complete rotation of the Earth on its axis.

Marginal Utility

The added satisfaction or utility gained from consuming an additional unit of a good or service.

Spending

Engaging in transactions to acquire goods or services by spending money.