Refer to the Accompanying Graph to Answer the Questions That

question 135

Multiple Choice

Refer to the accompanying graph to answer the questions that follow.

-If this firm is maximizing profits,total revenue is represented by the area:

• A)B C.
• B)A C.
• C)B C.
• D)A B.
• E)(A +
• B) C.

---

Definitions:

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead to individual products or job orders based on a specific activity base.

Direct Labor-hours

The total number of work hours directly spent on manufacturing a product.

Materials Price Variance

The difference between the actual cost of materials purchased and the expected cost based on the standard price.

Materials Quantity Variance

The variance between the actual and projected amounts of materials consumed in manufacturing, multiplied by the unit's standard cost.