-The Price of Product a Is $3, the Price of Product

question 289

Multiple Choice

-The price of product A is $3, the price of product B is $2, and you have $18 to spend. What combination of product A and product B will give you the most satisfaction?

• A) 5 units of product A; 1 unit of product B
• B) 4 units of product A and 3 units of product B
• C) 2 units of product A and 5 units of product B
• D) 3 units of product A and 5 units of product B

---

Definitions:

Volume Variance

The difference between the budgeted and actual quantity of units sold or produced, affecting budget and operational planning.

Fixed Overhead

The costs that do not vary with the level of production or sales, such as rent, salaries, and insurance.

Controllable Variance

The difference between the actual and expected or budgeted figures of costs and revenues that management can directly influence or control through their actions.

Direct Labor Hour

A measure of the labor directly spent on manufacturing a product, often used as a basis for allocating labor costs to products.