Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Why should a production-volume variance (PVV) that is material be prorated among work-in-process, finished goods, cost and cost of goods sold rather than writing it

Why should a production-volume variance (PVV) that is material be prorated among work-in-process, finished goods, cost and cost of goods sold rather than writing it all off to cost of goods sold?

a.

If a PVV is always written off to cost of goods sold, then the assets on the balance sheet would be the same as actual costs.

b.

If a PVV is always written off to cost of goods sold, then the liabilities on the balance sheet would be overstated.

c.

If a PVV is always written off to cost of goods sold, then the balances in the inventory accounts on the balance sheet would be most accurate.

d.

If a PVV is always written off to cost of goods sold, a company could set its standard costs to either increase or decrease operating incomes.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Empirical Studies On Economics Of Innovation Public Economics And Management

Authors: Mehmet Huseyin Bilgin, Hakan Danis, Ender Demir, Ugur Can

1st Edition

3319501631, 9783319501635

More Books

Students also viewed these Accounting questions

Question

Statistical regression: Were extreme groups used?

Answered: 1 week ago