Laurie Knows Little About Cooking and Does Not Want to Spend

question 71

Multiple Choice

Laurie knows little about cooking and does not want to spend the time to learn how to make a quiche.However,she has been asked to bring a quiche to an office retirement party.Not wanting to make a poor choice,she is likely to:

• A) intuitively make the right choice
• B) avoid making a decision by not attending the party
• C) buy the most expensive pre-made quiche (perhaps paying too much),guessing that the price is related to quality
• D) research the product and buy the least expensive frozen quiche she can find
• E) buy the least expensive frozen quiche because most consumers feel that price is not directly related to quality

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Definitions:

Standard Cost Variances

The differences between the actual costs incurred and the standard costs previously set for materials, labor, and overhead in manufacturing.

Labor Efficiency Variance

The difference between the actual number of labor hours worked and the standard hours expected, multiplied by the standard labor rate.

Labor Rate Variance

The difference between the actual cost of labor and its expected cost based on standards or budgets.

Direct Labor Employees

Workers who are directly involved in the manufacturing of products, including those who operate machinery, assemble products, or perform manual labor that can be directly attributed to specific goods or services.