Respuesta :
Answer:
Both A and B are correct.
Explanation:
Variance analysis help the business to identify the deviation from their budgeted expenditures. The budget cost or volume is analyzed against the actual expenditure or production volume. Variance can be favorable or unfavorable. An unfavorable material price variance will increase the cost of finished goods.
The statements that are true include C. Both of these are true.
From the complete question, it should be noted that if variances are prorated at the end of the accounting period, an unfavorable direct materials price variance will increase the value of the finished goods inventory when prorated.
The price variance is the difference between the expected cost of an item and the actual cost of the item when it was purchased. Also, insignificant variances are not generally prorated at the end of the accounting period and are closed to the cost of goods sold.
Therefore, both options are true.
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