The immediate write-off of overhead variances is used because ________.
A) it is simpler
B) the company has probably sold most of the goods produced during the period so prorating the variance to inventory accounts would not produce materially different results
C) the extra overhead costs result from inefficiencies in the current period and therefore do not represent assets
D) all of the above

Question

Quizplus · Accepted Answer

The immediate write-off of overhead variances is used because it is simpler, the company has probably sold most of the goods produced during the period so prorating the variance to inventory accounts would not produce materially different results, and the extra overhead costs result from inefficiencies in the current period and therefore do not represent assets. Therefore, all of the above options are the reasons for using immediate write-off of overhead variances.

The Immediate Write-Off of Overhead Variances Is Used Because ________