-Refer to Exhibit 2-1

question 144

Multiple Choice

-Refer to Exhibit 2-1.The movement from point A to point B is a movement from

• A) a productive efficient point to a productive inefficient point.
• B) a point with more guns and less butter to a point with more butter and even more guns.
• C) a productive efficient point to another productive efficient point.
• D) a productive inefficient point to a productive efficient point.

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Definitions:

Direct Materials Quantity Variance

The difference between the actual quantity of materials used and the standard quantity expected to be used, multiplied by the standard price per unit.

Overhead

The ongoing expenses of operating a business that are not directly associated with the production of goods or services.

Standard Labor Hours

A measurement in accounting for the amount of time workers are expected to spend on tasks, typically used to plan or assess productivity.

Direct Materials Price Variance

The difference between the actual cost of direct materials purchased and the expected (standard) cost multiplied by the actual quantity purchased.