Use the Following Table to Answer the Following Questions

question 70

Multiple Choice

Use the following table to answer the following questions.

-What is the surplus when the price floor is $1.75 in the market for public transportation?

• A) 100,000
• B) 86,000
• C) 75,000
• D) 40,000
• E) 0 (zero)

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Definitions:

Materials Quantity Variance

The difference between the actual amount of materials used in production and the standard amount expected, measured in terms of cost.

Labor Price Variance

The difference between the actual cost of direct labor and the standard or expected cost.

Labor Quantity Variance

The difference between the actual labor hours used and the standard hours planned, multiplied by the standard hourly labor rate.

Predetermined Manufacturing Overhead Rates

A rate used to allocate manufacturing overhead costs to products based on a standard cost, established in advance of production.