At the end of a period,a significant material quantity variance should be
A)closed to Cost of Goods Sold.
B)allocated among Raw Material,Work in Process,Finished Goods,and Cost of Goods Sold.
C)allocated among Work in Process,Finished Goods,and Cost of Goods Sold.
D)carried forward as a balance sheet account to the next perioD.

Question

Quizplus · Accepted Answer

A significant material quantity variance should be allocated among the inventory accounts (Work in Process, Finished Goods) and Cost of Goods Sold, as it represents the difference between the actual and expected usage of materials during production. Option A is incorrect because a variance is not a direct expense, but rather affects inventory values. Option B is too broad, as not all inventory accounts may be affected by the variance. Option D is incorrect, as variances are typically closed out at the end of the accounting period.

At the End of a Period,a Significant Material Quantity Variance