If the Money Price of a Resource Such as Oil

question 337

Multiple Choice

If the money price of a resource such as oil falls, then the

• A) SAS curve shifts rightward.
• B) SAS curve shifts leftward.
• C) LAS curve shifts leftward.
• D) LAS curve shifts rightward.

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Definitions:

Materials Price Variance

The difference between the actual cost of materials and the standard cost, used to assess efficiency in purchasing raw materials.

Raw Materials

The basic substances in their natural, modified, or semi-processed states, used as inputs for the production process in manufacturing goods.

FOH Budget Variance

The difference between the actual factory overhead costs incurred and the budgeted overhead costs set at the beginning of a period.

Fixed Manufacturing Overhead

Costs associated with production that remain constant, regardless of the scale of production output, including salaries of managerial staff and depreciation of factory equipment.