Respond that the following statements are TRUE or FALSE:

1) A favorable variance has a debit balance and is a contra-revenue.

2) An unfavorable variance for an expense means more expense has been incurred than planned.

3) The favorable variances have credit balances. They are contra-expenses and therefore decrease the expense Cost of Goods Sold.

4) When a manufacturing company uses standard costing system, the direct material cost variance will be recorded at the time of issue of raw material for production.

5) Managers who follow the management by exception principle investigate only those variances that are unfavorable.