A Company Purchases 130,000 Kilograms of Materials

question 56

Multiple Choice

A company purchases 130,000 kilograms of materials.The materials price variance is $26,000 favourable.What is the difference between the standard and actual price paid for the materials?

• A)$5.00
• B)$0.20
• C)$5.50
• D)$0.25

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Definitions:

Consumer's Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount they actually pay.

Earplugs

Small devices inserted into the ear canal to protect the ears from loud noises, water, or to block out sound for concentration or sleep.

Utility Function

Mathematical model that quantifies satisfaction levels consumers receive from consuming various quantities of goods and services, guiding choices under constraint.

Consumer's Surplus

The gap between what consumers are prepared and capable of spending for a product or service and the aggregate sum they end up paying.