Figure 10-3

question 121

Multiple Choice

Figure 10-3. Bortello Corporation produces high-quality leather boots.The company has a standard cost system and has set the following standards for materials and labor:
During the year Bortello produced 125 boots.Actual leather purchased was 1,700 strips,at $16 per strip.There were no beginning or ending inventories of leather.Actual direct labor was 1,500 hours at $15 per hour.
Refer to Figure 10-3.Compute the total budget variances for materials and labor,respectively.

• A)$2,800 F and $7,500 F
• B)$2,800 F and $7,500 U
• C)$2,800 U and $7,500 U
• D)$2,800 U and $7,500 F

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Definitions:

Purely Competitive Firms

Companies that operate in a market where there are many buyers and sellers trading identical products so that each buyer and seller is a price taker.

Production Cost-curves

Graphical representations that show the relationship between the cost of production and the quantity of output produced.

Price Discrimination

A pricing strategy where a seller charges different prices for the same product or service to different customers, based on factors like willingness to pay, market conditions, or customer attributes.