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ABC company uses a standard costing system. In April 2019, $1,000 of unfavorable price variance and...

ABC company uses a standard costing system. In April 2019, $1,000 of unfavorable price variance and $2,000 of favorable efficiency variance for direct labor were recorded. In addition, the company recorded $2,500 of unfavorable variable overhead flexible budget variance and $3,000 of favorable fixed overhead variance. The company makes year-end adjustments to close all variances into the cost of goods sold account. Which of the following journal entries would have been recorded for April? Group of answer choices Debit cost of goods sold for $1,500 Credit direct labor efficiency variance for $2,000 Debit cost of goods sold for $8,500 Credit cost of goods sold for $1,500

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Answer #1
Journal entry
S.no. Accounts title and explanations Debit $ Credit $
a. Labour effciiency variance 2000
Fixed overheads variance 3000
    Labour price variance 1000
    Variable overheads flexible budget variance 2500
    Cost of goods sold 1500
(for closing the variances)
Answer is Credit cost of goods sold $ 1500.
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