Which one of the following journal entries in a standard cost system is needed at the end of the period to close out to Cost of Goods Sold an unfavorable production-volume variance?
A) A credit to Finished Goods Inventory, at standard cost.
B) A credit to Cost of Goods sold, at standard cost.
C) A credit to Cost of Goods sold, at actual cost.
D) A debit to the Production Volume Variance account.
E) A debit to Cost of Goods sold.

Question

Quizplus · Accepted Answer

An unfavorable production-volume variance indicates that the actual production was less than the expected production. To close this variance at the end of the period, it is debited to Cost of Goods Sold. This increases the Cost of Goods Sold to reflect the higher per-unit cost due to lower production volume.

Which One of the Following Journal Entries in a Standard