The Schedule of Total Costs for a Table-Manufacturing Company Is

question 97

Multiple Choice

The schedule of total costs for a table-manufacturing company is presented in the table below. The firm sells its product in a price-taker market at $120 per table. What is the maximum monthly profit (or minimum loss) that the firm will be able to earn?

• A)$15 loss
• B)zero
• C)$5 profit
• D)$10 profit

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Definitions:

Spending Variance

Spending variance is the difference between the budgeted or standard cost of expenses and the actual amount spent, indicating whether costs were higher or lower than expected.

Manufacturing Overhead

All manufacturing costs except direct materials and direct labor, including costs related to operating the factory like rent, utilities, and equipment depreciation.

Activity Variance

The difference between planned activity levels and actual activity levels, used for budgeting and planning purposes.

Refurbishing Materials

Materials used in the process of cleaning, repairing, and updating products to a like-new condition, often part of a business strategy to offer sustainable or cost-effective options to customers.