Figure 17-4 Shannon Ltd.'s Standard Cost Card Contained the Following Information

question 16

Multiple Choice

Figure 17-4
Shannon Ltd.'s standard cost card contained the following information:
Direct labour: 1.25 hours * £8.00 per hour = £10.00
Shannon planned to make 12,000 units. Shannon actually made 10,000 units using 13,000 hours.
-Refer to Figure 17-4. Shannon's labour efficiency variance was

• A)£4,625 unfavourable.
• B)£4,000 unfavourable.
• C)£27,750 unfavourable.
• D)£24,000 unfavourable.

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Definitions:

New Entrants

New entrants refer to companies that have recently entered a market, bringing competition and potential disruption to established market dynamics.

Pure Monopoly

Pure Monopoly is a market structure where a single seller controls the entire supply of a product or service, and where the entry of new competitors is highly restricted.

Product Price

The cost assigned to a good or service which reflects its value in the marketplace.

X-inefficiency

X-inefficiency occurs when a firm produces outputs at higher costs than is theoretically necessary, often due to a lack of competitive pressure.