A Business Buys $7,000 Worth of Resources to Produce a Product.The

question 113

Multiple Choice

A business buys $7,000 worth of resources to produce a product.The business makes 150 units of the product and each of them sells for $90.The value added by the business to these products is:

• A)$13,500
• B)$6,500
• C)$7,000
• D)$6,850

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Definitions:

Performance Reports

Documents that compare actual results to planned or budgeted performance in order to assess how well a company or department is operating.

Activity Variance

The difference between the planned activity level and the actual activity level, often analyzed in budgeting and variance analysis.

Expenses

The outflows or the use of assets in the generation of revenue, including costs of goods sold, operating expenses, and non-operating expenses.

Unfavorable Activity Variance

A discrepancy where the actual cost exceeds the budgeted or planned cost in managerial accounting, often analyzed in the context of activity-based costing.