If M Is $800, P Is $2, and Q Is

question 21

Multiple Choice

If M is $800, P is $2, and Q is 1,200, then

• A) aggregate expenditures will be $1,600.
• B) aggregate expenditures will be $960,000.
• C) V must be 3.
• D) V must be 1.5.

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Definitions:

Price Variance

The difference between the expected cost of an item and its actual cost, often analyzed in budgeting and cost management.

Standard Price

A predetermined cost that serves as a benchmark for evaluating actual cost performance in purchasing or production.

Direct Materials

Raw materials that can be directly traced to the production of specific goods or services.

Manufacturing Cost Variance

The difference between the actual costs of production and the standard or expected costs, indicating efficiency or inefficiency in the manufacturing process.