Bonaventura Boots had the following variances at year-end:
What is the effect of closing these variances on the Cost of Goods Sold account at year-end?
A) Increase by $35
B) Decrease by $35
C) Increase by $715
D) Decrease by $715

Question

Bonaventura Boots had the following variances at year-end:
 What is the effect of closing these variances on the Cost of Goods Sold account at year-end?
A) Increase by $35 
B) Decrease by $35 
C) Increase by $715 
D) Decrease by $715

Quizplus · Accepted Answer

Unfavorable DM Price Variance + Unfavorable DM Efficiency Variance) - Favorable DL Efficiency Variance = Change to Cost of Goods Sold; ($250 U + $125 U) - $340 F = $35 increase (debit) to Cost of Goods Sold.

Bonaventura Boots Had the Following Variances at Year-End