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.

Understand the effect of changes in sales volume on cost volume profit (CVP) analysis, including changes in sales mix.

Evaluate the effects of adjustments in fixed and variable costs on the break-even point and target profit calculations.

Recognize the advantages and assumptions of activity-based costing approach in CVP analysis.

Calculate the desired sales mix to achieve a target profit or break-even point.

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