Exhibit 7-18 -Consider Exhibit 7-18. the Rotation from AB to AC Reflects

question 14

Multiple Choice

Exhibit 7-18
-Consider Exhibit 7-18. The rotation from AB to AC reflects a(n)

• A) increase in the price of labor
• B) increase in the price of land
• C) decrease in the price of labor
• D) decrease in the price of land
• E) increase in the amount the producer can spend

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Definitions:

October

The tenth month of the year in the Gregorian calendar, preceding November.

Variable Overhead Efficiency Variance

This is the difference between the expected (standard) cost of variable overheads based on actual production outputs and the actual variable overhead costs incurred.

Materials Quantity Variance

A measure of the difference between the actual quantity of materials used in production and the standard quantity expected to be used, multiplied by the standard cost per unit of materials.

August

The eighth month of the year in the Gregorian calendar.