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If the difference is immaterial (insignificant)- the variance is closed to Cost of Goods Sold. This has no effect on unit cost and treats the entire variance as a period cost.Journal Entry:Factory Overhead Applied xxxxCost of Goods SoldxxxxFactory Overheadxxxx(if under applied)Factory Overhead AppliedxxxxCost of Goods SoldxxxxFactory Overheadxxxx(if over applied

If the difference is immaterial (insignificant)- the variance is closed to Cost of Goods Sold. This has no effect on unit cost and treats the entire variance as a period cost.Journal Entry:Factory Overhead Applied xxxxCost of Goods SoldxxxxFactory Overheadxxxx(if under applied)Factory Overhead AppliedxxxxCost of Goods SoldxxxxFactory Overheadxxxx(if over applied

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter8: Standard Costs And Variances
Section: Chapter Questions
Problem 21MC: The fixed factory overhead variance is caused by the difference between which of the following? A....
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If the difference is immaterial (insignificant)- the variance is closed to Cost of Goods Sold. This has no effect on unit cost and treats the entire variance as a period cost.Journal Entry:Factory Overhead Applied xxxxCost of Goods SoldxxxxFactory Overheadxxxx(if under applied)Factory Overhead AppliedxxxxCost of Goods SoldxxxxFactory Overheadxxxx(if over applied)

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