Laura Is a Manager for HP

question 62

Multiple Choice

Laura is a manager for HP.When Laura must decide whether to produce a few additional printers,she is choosing at the margin when she compares

• A)the total revenue from sales of printers to the total cost of producing all the printers.
• B)the extra revenue from selling a few additional printers to the extra costs of producing the printers.
• C)the extra revenue from selling a few additional printers to the average cost of producing the additional printers.
• D)the revenue from selling HP's printers as compared to printers from competing companies,such as Lexmark.
• E)the cost of producing HP's printers as compared to printers from competing companies,such as Lexmark.

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Definitions:

Fixed Overhead Costs

Regular, unchanged costs incurred by a business, regardless of its level of production or activity, such as rent and salaries.

Control Perspective

An approach focusing on the monitoring and adjusting of processes and strategies to achieve desired outcomes or objectives.

Revenue Variance

The difference between how much the revenue should have been, given the actual level of activity, and the actual revenue for the period. A favorable (unfavorable) revenue variance occurs because the revenue is higher (lower) than expected, given the actual level of activity for the period.

Cost Variance

The difference between the expected cost of a project or production process and the actual cost incurred.