-The Table Above Gives the Total Revenue and Total Cost

question 142

Multiple Choice

-The table above gives the total revenue and total cost for a perfectly competitive firm producing chocolate chip cookies. If the firm is producing 4 pounds of cookies, to maximize its profit it will

• A) increase its output.
• B) decrease its output.
• C) continue producing 4 pounds of cookies.
• D) shut down.

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Definitions:

Direct Materials Cost Variance

The difference between the actual cost of direct materials used in production and the standard cost expected to be used.

Direct Labor Cost Variance

The difference between the budgeted cost of direct labor and the actual cost incurred.

Cost Variance

The difference between the expected (budgeted) cost and the actual cost incurred.

Actual Costs

The real, observed expenditures incurred as opposed to estimated or standard costs.