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hello Mr.Moffat..I listened your lecture on Variance Analysis(part a)example 1..in which you told that value inventory at standard cost..why.?what is the reason behind it?please explain…thank you
Variance analysis is usually done each month. Some months costs will be higher than standard and some months they are likely to be lower than standard.
It would be confusing and misleading to keep changing the vale of inventory each month, and so throughout the year we continue to value the inventory and what we expect it to cost overall – I.e. The standard cost
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