Introduction to the Cost System; job Order Casting $49$ EXERCISES Exercise $1$: Theory True or false. Explain your answer if it is false. a$.$ Factory overhead variance is usualily treated as a period cost so that it is closed to the cost of goods sold secount or to income and expense summary. b$.$ Cost accounting is iseful to both financial accounting and management accounting. c$.$ The use of the perpetual inventory method is part of the internal control system so that at any one time, the responsibility for resources can be easily detemined d$.$ The voucher sysient and the controlling accounts for the different expenses and factory overhead may be used under both the non$-$cost and the cost systems e$.$ The positive difference between applied factory overhead and actual factory overhead is unfavorable and vice$-$versa. f$.$ The account "factory ledger" is used in the factory books and the account" general ledger" in the main office books. $3.$ Under the perputwal inventory method, the cost of raw materiais used, cost of goods manu factured, and cost of goods sold can be determined only after a physical count of the inventories. h$.$ When factory overhead variance is significant. it implies that there as an error in charging overbead to production so that the variance is treated as an adjusiment to "cost of goods manufactured". i$.$ The primary difference benveen cost and non$-$cost systems is the use of the perpetual inventory method in the latter. $1.$ When factory overhead applied exceeds actual factory overhead, it implie$-$ that goods being processed are absorbing more than the actual factory overhead and vice$-$versa.