Under What Condition(s) Might a Favorable Variance Be Considered Unfavorable

question 48

Multiple Choice

Under what condition(s) might a favorable variance be considered unfavorable?
I.When a manager overproduces to fully utilize labor in a non-bottleneck department
II.When a manager buys a better quality materials at a cheaper price

• A)I only
• B)II only
• C)Both I and II
• D)Neither I nor II

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Definitions:

Farm Products

Goods that are the result of agricultural activities, including crops, livestock, and the products derived from them.

Total Revenue Test

A method used to assess the impact of price changes on total revenue, analyzing if a product is elastic or inelastic in demand.

Elasticity

A measure of how much the demand or supply of a product changes in response to a change in price.

Total Revenue

The total amount of money a firm receives from the sale of its goods or services, calculated as the product of price and quantity sold.