In Evaluating Cost Variances,the Accounting Department Determines Whether Variances Are

question 90

True/False

In evaluating cost variances,the accounting department determines whether variances are favorable or unfavorable.

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Definitions:

Process Costing

A costing method used for continuous or batch processing environments where the product is homogeneous, assigning costs to units of output on an average basis.

Conversion Costs

The combined costs of direct labor and manufacturing overheads incurred to convert raw materials into finished products.

Equivalent Units

A method used in cost accounting to express partially completed goods in terms of finished goods to accurately calculate inventory costs.

Process Costing

An accounting methodology used to allocate costs to products based on the processes they go through in production, suitable for homogeneous products.