Table 1-1 Eva Runs a Small Bakery in the Village

question 16

Multiple Choice

Table 1-1
Eva runs a small bakery in the village of Roggerli.She is debating whether she should extend her hours of operation.Eva figures that her sales revenue will depend on the number of additional hours the bakery is open as shown in the table above.She would have to hire a worker for those hours at a wage rate of $12 per hour.
-Refer to Table 1-1.Using marginal analysis,how many hours should Eva extend her bakery's hours of operations?

• A)2 hours
• B)3 hours
• C)4 hours
• D)5 hours
• E)6 hours

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Definitions:

Controllable Variance

The difference between actual expenses and budgeted expenses that management has the ability to influence or control.

Volume Variance

The difference between the budgeted and actual volume of production, affecting fixed costs per unit and overall profitability.

Budgeted Overhead Costs

Estimated costs related to the indirect costs of production or operations planned for a specific period.

Standard Hours Allowed

The number of hours that should have been worked for the actual level of output.