Minneapolis Business Rogue Chocolatier Sells Specialty Chocolate Bars with a High

question 263

Multiple Choice

Minneapolis business Rogue Chocolatier sells specialty chocolate bars with a high cocoa content. The price of cocoa beans shot up 44 percent in 2008. How did this affect Rogue's short run costs?

• A) Short run variable costs would increase.
• B) Short run fixed costs would decrease.
• C) Short run total costs would decrease.
• D) Short run average fixed costs would increase.

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Definitions:

Standard Costing

Standard costing involves assigning a fixed cost to production and inventory for the purpose of budgeting and performance evaluation, allowing companies to identify variances and control costs.

Machine Breakdown

The failure of a machine to function, causing a halt in production or operations.

Material Quantity Variance

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

Standard Quantity (SQ)

Standard Quantity refers to the amount of materials or inputs that should be used in the production of a good or service under normal efficiency conditions.