Sales & Direct Costs Variance Flashcards
1
Q
On what are sales variances based?
A
Sales variances are based on budgeted sales levels.
2
Q
Describe the accounting treatment of non-significant variances at the end of the period.
A
These amounts are closed to Cost of Goods Sold.
3
Q
Define “standard quantity”.
A
Standard quantity is the standard amount of input units allowed for the actual number of output units produced.
4
Q
Are standards based solely on historical results?
A
No; standards are not only based on historical performance, as this may incorporate past periods’ inefficiencies.
5
Q
Who is responsible for direct material price variances?
A
Who is responsible for direct material price variances?
