If the CPI in the United States Was 150 in 2003

question 142

Multiple Choice

If the CPI in the United States was 150 in 2003 and 160 in 2004, the inflation rate over the year was_____

• A) 10 percent.
• B) 20 percent.
• C) 7 percent.
• D) 30 percent.
• E) 50 percent.

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Definitions:

Material Price Variances

The difference between the expected cost of materials and the actual cost incurred, useful in budgeting and cost management.

Labor Efficiency Variance

A measure used in cost accounting to gauge the difference between the actual hours taken to produce a good or service 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 standard rates and hours.

Standard Hours Allowed

The predetermined amount of time expected to be required to complete a unit of work, used as a benchmark in costing and efficiency analysis.