Ciresi Corporation manufactures one product.It does not maintain any beginning or ending Work in Process inventories.The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.The company has provided the following information:
The company does not have any variable manufacturing overhead costs and it recorded the following variances during the year:
The adjusted Cost of Goods Sold after closing all of the variances to Cost of Goods Sold will be closest to:
A) $1,066,952
B) $877,902
C) $730,330
D) $582,758

Question

Ciresi Corporation manufactures one product.It does not maintain any beginning or ending Work in Process inventories.The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.The company has provided the following information:
 The company does not have any variable manufacturing overhead costs and it recorded the following variances during the year:
 The adjusted Cost of Goods Sold after closing all of the variances to Cost of Goods Sold will be closest to:
A) $1,066,952 
B) $877,902 
C) $730,330 
D) $582,758

Quizplus · Accepted Answer

11ea7761_16d6_a519_81a5_0fff70628fd1_TB2580_00 An unfavorable total variance has the effect of increasing Cost of Goods Sold and thereby decreasing Retained Earnings. A favorable variance has the opposite effects on Cost of Goods Sold and Retained Earnings.
 11ea7761_16d6_cc2a_81a5_a9bc3deb74eb_TB2580_00

Ciresi Corporation Manufactures One Product