Asked by jimiesha archie on Jun 24, 2024
Verified
An debit balance in the direct material price variance account or direct labour price variance accounts would cause the costs of goods sold to
A) increase.
B) decrease.
C) stay the same.
D) have no impact.
Direct Material Price Variance
The difference between the actual cost of direct materials and the standard cost multiplied by the actual quantity used.
Costs Of Goods Sold
Direct costs attributable to the production of goods sold by a company, including materials and labor, but excluding indirect expenses such as sales and distribution costs.
- Comprehend the effects of real cost deviations from normative costs on the practice of cost accounting.
Verified Answer
JG
jefeson garciaJun 25, 2024
Final Answer :
A
Explanation :
A debit balance in the direct material price variance account or direct labor price variance account means that the actual price paid for the material or labor was higher than the standard price. This indicates that the cost of goods sold has increased, as the company paid more than expected for those inputs. Therefore, the answer is A - increase.
Learning Objectives
- Comprehend the effects of real cost deviations from normative costs on the practice of cost accounting.