Variances occurring in a standard backflush cost system are charged to a separate account as incurred and, if immaterial, are not prorated to inventories or, if material, they are prorated in the same manner as under a traditional standard cost system.

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In a standard backflush costing system, variances are indeed charged to a separate account as they occur. If these variances are immaterial, they are not allocated to inventories. However, if they are considered material, they are allocated to inventory and cost of goods sold in a manner similar to the traditional standard costing system, ensuring accurate cost representation in financial statements.

Variances Occurring in a Standard Backflush Cost System Are Charged