A variance that is considered immaterial should be closed to the cost of goods sold account.

Question

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If a variance is considered immaterial, it means that it does not have a significant impact on the overall financial statement. In such cases, the variance can be closed to the cost of goods sold account. This helps in reducing the complexity of the accounting process while maintaining the accuracy of the financial statement.

A Variance That Is Considered Immaterial Should Be Closed to the Cost