Table 3.3 -Consider Two Individuals, Nigel and Mia, Who Produce Hair Pins

question 15

Multiple Choice

Table 3.3

-Consider two individuals, Nigel and Mia, who produce hair pins and bandanas. Nigel's and Mia's hourly productivity are shown in Table 3.3. Mia's opportunity cost of producing one hair pin is

• A) 1/3 of a bandana.
• B) 2.5 bandanas.
• C) 3 bandanas.
• D) 10 bandanas.

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Definitions:

Standard Cost System

A cost accounting system that assigns fixed costs for materials, labor, and overhead to products, allowing for variance analysis.

Actual Results

The actual outcomes or figures achieved, compared against forecasts or budgeted amounts.

Raw Materials Price Variance

The difference between the actual cost and the standard cost of raw materials used in production, reflecting price fluctuations.

Standard Cost System

An accounting system that uses predetermined costs for products or services to compare against actual costs for performance evaluation.