Favorable overhead variances are always recorded with credits in a standard cost system.

Name: Favorable overhead variances are always recorded with credits in a standard cost system.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

In a standard cost system, overhead variances are compared with the standard overhead cost and actual overhead cost, and any favorable variance is considered as a credit and recorded on the credit side. This helps in reducing the cost of goods sold and increasing the profit margin. Therefore, the statement is true.

Favorable Overhead Variances Are Always Recorded with Credits in a Standard