Which of the Following Statements Is False

question 62

Multiple Choice

Which of the following statements is false?

• A) Unfavourable variances represent the costs of producing inefficiently.
• B) Unfavourable variances (after closing to cost of goods sold) cause cost of goods sold to be higher.
• C) Unfavourable variances are recorded as a credit entry.
• D) Significant unfavourable variances should be investigated by managers.

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Definitions:

Profitable Use

The utilization of resources or assets in a way that generates a positive return or profit.

Craft Shows

Events where artisans and makers display and sell their handmade goods, often featuring a wide range of crafts.

Variable Costs

Expenses that vary directly with the level of production or output, such as raw materials and direct labor.

Fixed Manufacturing Overhead

Fixed costs that are related to the manufacturing process, including factory rent, equipment depreciation, and salary of factory supervisors.