An debit balance in the direct material price variance account or direct labour price variance accounts would cause the costs of goods sold to
A) increase.
B) decrease.
C) stay the same.
D) have no impact.

Question

Quizplus · Accepted Answer

A debit balance in the direct material price variance account or direct labor price variance account means that the actual price paid for the material or labor was higher than the standard price. This indicates that the cost of goods sold has increased, as the company paid more than expected for those inputs. Therefore, the answer is A - increase.

An Debit Balance in the Direct Material Price Variance Account