Unfavorable standard cost variances are normally closed at the end of the period by:
A)Debiting the variance account and crediting Cost of Goods Sold.
B)Crediting the variance account and debiting Cost of Goods Sold.
C)Debiting the variance account and crediting Work in Process.
D)Crediting the variance account and debiting Work in Process.

Question

Quizplus · Accepted Answer

Unfavorable standard cost variances indicate that actual costs were higher than the standard or expected costs. To close these variances at the end of the period, the variance account is credited (to zero it out) and Cost of Goods Sold is debited (increased) to reflect the higher actual costs incurred.

Unfavorable Standard Cost Variances Are Normally Closed at the End