Bob's Barber Shop Cut 3,000 Heads of Hair in 2014and

question 89

Multiple Choice

Bob's Barber Shop cut 3,000 heads of hair in 2014and 3,100 in 2015.The price of a hair cut was $7 in 2014and $8 in 2015.If 2014is the base year, what was Bob's contribution to real GDP in 2014?

• A)$21,000
• B)$21,700
• C)$24,000
• D)$24,800

---

Definitions:

Direct Labor

The labor cost attributed directly to the production of goods or services.

Standard Cost

A predetermined cost of manufacturing a single unit or a number of units of a product, calculated for managerial accounting purposes.

Materials Quantity Variance

A measure of the difference between the actual quantity of materials used in production and the expected quantity, multiplied by the standard cost per unit.

Materials Price Variance

The deviation from the standard to the real price of materials, calculated by multiplying this difference by the amount of materials bought.