Eli uses a standard costing system. At the end of the fiscal year, only the following variance accounts had balances: Material Price Variance $ \quad\quad\quad \$ 260 $ (debit)
Material Quantity Variance $\quad\quad \$ 35 $ (credit)
Labor Efficiency Variance $ \quad\quad \$ 65 $ (credit) Assuming these amounts are not considered significant, which one of the following will be part of the journal entry to close these accounts?

Question

Quizplus · Accepted Answer

The Material Price Variance is a debit balance, which means that the actual price of materials used was higher than the standard price. The Material Quantity Variance is a credit balance, which means that the actual quantity of materials used was less than the standard quantity. The Labor Efficiency Variance is a credit balance, which means that the actual labor hours used were less than the standard labor hours. To close these accounts, the Material Price Variance and the Material Quantity Variance will be closed to Cost of Goods Sold, and the Labor Efficiency Variance will be closed to Manufacturing Overhead Variances.

Eli Uses a Standard Costing System $260 \quad\quad\quad \$ 260 $260

Eli Uses a Standard Costing System $\quad\quad\quad \$ 260$