Ferrero Corporation Manufactures One Product

Multiple Choice

Ferrero Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. The company has provided the following information: The company does not have any variable manufacturing overhead costs and it recorded the following variances during the year:
When the company closes its standard cost variances, the Cost of Goods Sold will increase (decrease) by:

A) $56,580
B) ($125,916)
C) ($56,580)
D) $125,916