Solution-Why should a production-volume variance

Why should a production-volume variance

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Reference no: EM132982960

Problem 1: 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.

Reference no: EM132982960

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Why should a production-volume variance

Reference no: EM132982960

Reference no: EM132982960

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