Mike Had to Relocate for Work

question 55

Multiple Choice

Mike had to relocate for work. He could have bought a house in the city, but he loves to sail, so he bought a house on a lake where he could moor his boat. As a result, Mike lengthened his commute to work by 30 minutes. Which theory can be used to explain his relocation choice?

• A) water quotient theory
• B) antiurbanization theory
• C) environmental-opportunity theory
• D) recreational living theory

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Definitions:

Materials Price Variance

The variance between the standard cost and the actual expense of materials, calculated by multiplying the amount bought.

Direct Materials

Raw materials that are directly traceable to the production of a specific product, representing a significant portion of the costs of goods sold.

Variable Overhead Rate Variance

The difference between the actual variable overhead costs incurred and the expected costs based on the predetermined overhead rate.

Direct Materials

Raw materials that are directly traceable and allocable to the production of specific goods or services.