The Consumer Price Index Measures the Cost Of

question 24

Multiple Choice

The consumer price index measures the cost of:

• A)a fixed basket of goods and services.
• B)a changing basket of goods and services.
• C)all goods and services purchased by consumers.
• D)goods and services required to live above the poverty level.

---

Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard overhead estimated, based on the actual level of activity.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the standard variable overhead based on the actual level of activity, reflecting efficiency in using overhead resources.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead costs incurred and the standard variable overhead costs, based on efficient use of resources.

Labor Rate Variance

The difference between the actual hourly wage paid to workers and the expected (or standard) wage rate, multiplied by the total hours worked.