Jigger Is Planning to Buy a House

question 3

Multiple Choice

Jigger is planning to buy a house. He has two options. A 2400 sq. ft. bungalow in Whitby costs $389 000. A similar size house costs $369 000 in Oshawa. Jigger plans to base his decision on the cost of property tax paid. Whitby charges the property tax at the mill rate of 13.59815, whereas Oshawa charges the property tax at the mill rate of 16.18347. Where will Jigger end up paying less tax and likely buy the home?

• A) Oshawa
• B) Whitby
• C) It costs the same in both Oshawa and Whitby
• D) Not enough data to make a decision
• E) He should not buy at all

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Definitions:

Labor Price Variances

The difference between the actual cost of labor and the budgeted or standard cost, which can indicate issues with wage rates or hours worked.

Labor Quantity Variances

The variance arising when there is a difference between the budgeted quantity of labor required for production and the actual quantity used, expressed in the cost associated with the variance.

Standard Labor Cost

The predetermined cost of the labor required to produce one unit of a product, considering factors like wage rates and productivity levels.

Direct Materials Data

Information regarding the raw materials used directly in the production of goods, crucial for cost accounting.