Refer to the Information Provided in Figure 9

question 77

Multiple Choice

Refer to the information provided in Figure 9.1 below to answer the question(s) that follow. Figure 9.1
-Refer to Figure 9.1. If this farmer maximizes profits, his average fixed costs will be

• A) $2.
• B) $7.
• C) $11.
• D) $24.

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Definitions:

Standard Quantity Of Hours

The set amount of labor hours estimated to be necessary for completing a task or producing a given amount of goods.

Direct Materials

Raw materials that are directly used in the production of goods, easily traceable to the finished product.

Materials Quantity Variance

The difference between the expected quantity of materials needed for production and the actual quantity used, valued at standard cost.

Labour Rate Variance

The difference between the actual cost of labor and the expected (standard) cost, indicating efficiency in labor utilization.