Question
When recording journal entries for production costs using a standard cost
accounting system, the favorable variances are recorded as ______ and the
unfavorable variances are recorded as ______. Multiple choice question. debits;
credits credits; debits debits, debits credits; credits
Answer & Explanation
In a standard cost accounting system, variances are recorded to reflect the
differences between actual costs and standard costs.
Favorable variances occur when actual costs are less than standard costs,
which is beneficial for the company. These are recorded
as credits because they represent a reduction in expenses or an increase
in income.
Unfavorable variances occur when actual costs exceed standard costs,
which is detrimental to the company. These are recorded
When recording journal entries for production costs using a standard cost
accounting system, the favorable variances are recorded as ______ and the
unfavorable variances are recorded as ______. Multiple choice question. debits;
credits credits; debits debits, debits credits; credits
Answer & Explanation
In a standard cost accounting system, variances are recorded to reflect the
differences between actual costs and standard costs.
Favorable variances occur when actual costs are less than standard costs,
which is beneficial for the company. These are recorded
as credits because they represent a reduction in expenses or an increase
in income.
Unfavorable variances occur when actual costs exceed standard costs,
which is detrimental to the company. These are recorded
