Table 3-11 Assume That Falda and Varick Can Switch Between Producing Wheat

question 403

Multiple Choice

Table 3-11
Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate.

-Refer to Table 3-11.Falda's opportunity cost of one yard of cloth is

• A) 2/3 bushel of wheat and Varick's opportunity cost of one yard of cloth is 2/5 bushel of wheat.
• B) 2/3 bushel of wheat and Varick's opportunity cost of one yard of cloth is 5/2 bushels of wheat.
• C) 3/2 bushels of wheat and Varick's opportunity cost of one yard of cloth is 2/5 bushel of wheat.
• D) 3/2 bushels of wheat and Varick's opportunity cost of one yard of cloth is 5/2 bushels of wheat.

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Definitions:

Volume Variance

A measure used in budgeting and accounting to illustrate the difference between expected sales volume and actual sales volume.

Standard Costs

Predetermined costs for manufacturing a product or delivering a service, used as targets or benchmarks.

Variances

The differences between planned, budgeted, or standard costs and actual costs.

Widgets

A generic term often used to refer to any product or manufactured item for examples or hypothetical situations.