Suppose the Price of Tomatoes Dramatically Increases

question 10

Multiple Choice

Suppose the price of tomatoes dramatically increases.Which of the following could cause this change?

• A)Hurricanes during the late summer damages the Florida crop, shifting supply left
• B)A reduction in tariffs of tomatoes from Central American, shifting supply right
• C)Anews report stating that a pesticide used on tomatoes might cause cancer, shifting the demand to the right
• D)Advertising for catsup increases demand for catsup, shifting the demand curve to the left

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Definitions:

Direct Materials Quantity Variance

This measures the difference between the actual quantity of materials used in production and the standard amount expected to be used.

Standard Costs

Pre-determined or estimated costs for products or services used for budgeting and performance evaluation purposes.

Actual Costs

The genuine costs incurred in the production or acquisition of goods and services.

Direct Materials Price Variance

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