Magenta Company Has Developed Capacity Standards The Volume Variance Is:
A)$15,000 Unfavorable

question 7

Multiple Choice

Magenta Company has developed capacity standards. The following information is provided by Magenta: $\begin{array}{lr}\text { Standard cost of the activity capacity acquired } & \$ 125,000 \\\text { Standard cost of the activity capacity used } & 90,000 \\\text { Standard onst of the actial activity } & 100,000\end{array}$
The volume variance is:

• A)$15,000 unfavorable.
• B)$35,000 unfavorable.
• C)$25,000 unfavorable.
• D)$10,000 unfavorable.

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Definitions:

Additional Unit

Refers to the increment of one unit in the quantity of goods or services produced or consumed.

Marginal Product of Labor

The additional output that is produced by adding one more unit of labor, keeping other inputs constant.

Increased Productivity

A situation where more output is produced from the same amount of inputs due to efficiency improvements.

Managers Training

Programs designed to improve the skills, knowledge, and performance of individuals in leadership and supervisory roles.